How much would it cost to open a Prop Firm Office (ie. Bright Trading Affiliate)

Discussion in 'Prop Firms' started by CoolTraderDude, May 8, 2012.

  1. Just wondering if any of the office managers/owners would like to share how much capital it took them to open up an office with their "parent" firm?

    Is it worth it in this environment...?

    AND... On average how much capital does the parent company (franchise owners) put up...?

    Currently I have a bunch of people telling me to open up an office and I'm not really sure that it's worth it...
     
  2. You can do a lot of stuff remotely now and I think that has been the trend for the past 5 years or so. i.e. Virtual trading floors.

    But to answer your question probably need about 50k
     
  3. Around 50-70k is what I've heard too... Do you operate an office...?
     
  4. rmorse

    rmorse ET Sponsor

    A broker dealer prop set up is referred to as a Joint Back Office. JBO requires a BD which will cost around 50k and 3 to 6 months to set up. Minimum Captal of $1m and a prime broker willing to enter into a JBO relationship with you. Then you have all the regulatory stuff. Expensive to operate. That side of the business has very tight margins and your looking to get in at a time when others are looking to get out.

    Bob
     
  5. Youranswer is irrelevant. He is not asking how to start a firm LIKE Bright trading, but how much it costs to open a branch office for them ;)

    Not THAT much, I assume. On the expenses side you need some space and a number of computers - all QUITE cheap these days, plus a number of uplinks and a decent Router + some pro to set it up ;)

    THe main cost will be tgetting traders and covering your expenses until that is done by those traders. The marketing and running cost side will be more relevant than any investment from the hardware side.

    On top naturally you need an agreement with whoever you join, but I assume that is out of the scope of the question.
     
  6. Even a branch has to stick to some pretty strict requirements. Most branches probably put up their own risk deposit in case their traders go negative. I'd say nowadays it's closer to 100k & higher if you are going to invest in physical space, computers, tvs, networking, etc.
     
  7. I'm sure that if you have to ask, then you cannot afford it:)
     
  8. Maybe you could partner with an existing broker-dealer under their licenses rather than rolling your own?
     
  9. Consider Researching This Strategically...

    First....Find out from EXISTING Bright Affiliates what were their start up costs... interview them... even pay them if you have too to get accurate reliable info...

    Second... and more importantly... Find out from Bright HOW MANY affiliates have been started up in the past and how many of those are still going... and subtract to get the ones that closed their doors...

    that will give you the failure rate...

    Third: Contact one of the Failed affiliates and interview them... to get info on difficulties of the business...

    Fourth: Contact an attorney in secruities laws to find your legal risks...

    Find your risk... Define Your Risk First... Know Your Risks Going In...

    Hope this Helps... Edge...
     
  10. I have an idea, why not just call me, LOL. We have a couple of options available. Not really too costly, seriously.

    I have class tomorrow, but call me Thursday, mid trading day. IM first if you like, but with the variables involved, a call would work better.

    As to Mr. Edge Hunter, a couple of good points, a couple that are irrelevant since each business venture is dependent on the person doing it. But, that's why the phone call. Do you really want to do something like this? I'll be totally honest with you when you call.

    Don 702.739.1393
     
    #10     May 8, 2012