What do i need to found a trading company ?

H

HATEtheRisk

Hello,

please can anyone answer my question.

Lets say i want to found a trading company with a starting capital of 5M $. OK.

What do i need else, licenses, how to come in contact with the right bank for institutional access, and so on ...... ???

Any advices ???

Thank you very much

Best Regards
 
I am currently live in Spain, but i will move to Canada in about 2-3 months.

So i want to start the company in Canada.

Any canadian here, who knows about licenses and the ohter stuff ???

thank you
 
Depends on what you want and where you live. Outside the US is easy: just contact an existing prop firm and say you want to join them and work out a deal. You'll then trade through their brokerage, using their platform and if you're outside the US you won't need any licenses at all. If you live in the US I think you might need to obtain a series 7 license, but not sure on that, I don't live in the US and you don't either as I understand from your post :)

The other option is to start a brokerage firm yourself but that's a hell of a job, you'll need quite a few series licenses, you'll need to maintain an US based legal entity (if you want to trade the US that is of course), and you'll need to hire someone with experience and licenses for the first few years. And then you'll need to get your technology in place as well, which you can lease, but those costs are steep as well. Lastly you'll need to sign a clearing contract with a clearing firm.

The first option is hassle free, the second is a LOT of work and will need quite an investment.
 
Quote from luckybastard:

Depends on what you want and where you live. Outside the US is easy: just contact an existing prop firm and say you want to join them. You'll then trade through their brokerage and if you're outside the US you won't need any licenses at all. If you live in the US I think you might need to obtain a series 7 license, but not sure on that, I don't live in the US and you don't either as I understand from your post :)

The other option is to start a brokerage firm yourself but that's a hell of a job, you'll need quite a few series licenses, you'll need to maintain an US based legal entity (if you want to trade the US that is of course), and you'll need to hire someone with experience and licenses for the first few years. And then you'll need to get your technology in place as well, which you can lease, but those costs are steep as well. Lastly you'll need to sign a clearing contract with a clearing firm.

The first option is hassle free, the second is a LOT of work and will need quite an investment.
More...

Thank you very much for your reply.:)

How i wrote before, i want to start the business in Canada.
Are you sure that i dont need any kind of license ??? Just start it like any other company ??? That would be cool and easy.

No i dont want to be a broker, i am just a trader, thats all i need.
I just want to expand my business, so that i can get my satisfaction, because i know i have potential and it was always my dream to found my own trading company and build it up step by step.

Prop firm, hmm..... - i dont like that.
I want trade directly with the big banks, that feels better for me, no other firm between it.

Well i have sent an email to HSBC about my situation.
I will just wait what they tell me, how i have to do it.

Thank you anyway.

Best regards
 
The advantage of using a prop firm is that they can supply you the buying power. However if you're really willing to put in 5M yourself, you can just contact a huge brokerage firm directly, but that's what you're doing anyway if I understand correctly, with HSBC.

A brokerage firm will give you between 4-7x leverage on your 5M.

Good luck !
 
BTW, since you're in Canada: if you really want to put up 5M I'd suggest contacting Penson, I'm sure they can give you a great deal. Most Canadian prop firms use Penson anyway.
 
Quote from luckybastard:

BTW, since you're in Canada: if you really want to put up 5M I'd suggest contacting Penson, I'm sure they can give you a great deal. Most Canadian prop firms use Penson anyway.
More...

Hi,:)

yes i want to start minimum with 5M €, dont know whats it current in CAD.
So, how you say, then i dont need a prop firm. Thats good i dont want one. :p :cool:

Penson, hmm ??? They are really big, i know. But i prefer a real Big Bank, their i have the best security for my money and for my mind, you know.

But i have to collect more information, a lot more, before i can make a decision, who my broker will be. But for sure i want a bank, i dont want to do any small business any more, i am tired of it.

4-7x leverage is great, i dont need so much. the more money to trade the less leverage is necessary. 30% leverage/margin would be enough. by using almost the whole capital for trading.

By the way, can i use all my company capital for trading, or do i need keep some in safe assets ???

thank you

:) :p
 
Quote from HATEtheRisk:
Penson, hmm ??? They are really big, i know. But i prefer a real Big Bank, their i have the best security for my money and for my mind, you know.
[/B]
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Most probably Penson will offer a way of insuring your money against bankruptcy. That way you'll still have your money when Penson blows up. Penson is known to offer great rates and good Easy to Borrow lists. If I were you I'd contact a few brokerages and compare their rates, ETB lists, software and see if they offer a way to insure against bankruptcy.

Once you have a deal, you can be up and running in no-time, since you're in Canada and don't need licensing.

Good luck !
 
Quote from luckybastard:

Depends on what you want and where you live. Outside the US is easy: just contact an existing prop firm and say you want to join them and work out a deal. You'll then trade through their brokerage, using their platform and if you're outside the US you won't need any licenses at all. If you live in the US I think you might need to obtain a series 7 license, but not sure on that, I don't live in the US and you don't either as I understand from your post :)

The other option is to start a brokerage firm yourself but that's a hell of a job, you'll need quite a few series licenses, you'll need to maintain an US based legal entity (if you want to trade the US that is of course), and you'll need to hire someone with experience and licenses for the first few years. And then you'll need to get your technology in place as well, which you can lease, but those costs are steep as well. Lastly you'll need to sign a clearing contract with a clearing firm.

The first option is hassle free, the second is a LOT of work and will need quite an investment.
More...

why don`t just put $5M to a bank?

http://www.infochoice.com.au/banking/
 
But for sure i want a bank, i dont want to do any small business any more, i am tired of it.
More...
A friend of mine followed the same reasoning. Instead of following my suggestion to go with a prop firm, he went to Goldman Sachs. They gave him a shitty deal with high costs. He couldn't compete or be profitable with that deal and went out of business within a year.

My advice: don't pay too much attention to 'big names'. The deal you're getting is your lifeline.
 
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