from googleing the internet it looks like I have to be a member of FINRA and some other firms too, all what I need is 100k and we are set, I also need a business plan too.
CBSX is easier to join, then ARCA. FINRA membership is the most difficult and the one that has the most value. I wish you luck. I was an AMEX member for over 25 years. I was VERY happy to give up my BD.
veryFatcat Registered: May 2011 Posts: 5 05-07-11 03:57 AM I would like to start my own B/D firm so I can save on the fee's that I pay for my broker. what I want to do is have my own online trading platform. what and where should I start? I need help 1st you must have series 7 for 2 years then 24 for at least 2 years ( or have someone who has) before you can file with FINRA to be a broker dealer, showing financial responsibility. Assuming you have done all this then you'll need 1) Platform ( Redi, Sterling, Light Speed etc.) 2) Risk Management software 3) Back Office ( accounting & audit) 4) CRM software 5) Workflow software 6) Clearing firm i.e. if all you want is to lower your comissions then it would be too much hustle for you to jump through these hoops, you'd be better off increasing your volume or creating efficiencies in your trading style for lesser fees.
Bypass the broker / dealer and go directly to the clearing firm. I remember a while back if you were just a customer you could go to wedbush and they'd start you out at 1 mil .0001. I can't remember the volume requirement, but it didn't seem like that much for that rate. 250,000 min required to open there
I would like to talk to a customer or BD, going direct to any Prime Broker that received 1 mil for clearance only, let alone clearance and execution which has an added fee. (Execution pays for the DMA routing fees to the ECNs.) I'm impressed if that's true.
there are shops out there clearing for 1/2 mil (.005 cents per 1000 shares). Why would you ever want to open up your own BD when you can leverage someone else at those rates?
I hate to correct people on the threads, but 1/2 mil is .0005 per 1000. So if I buy 1000 shares it would cost $0.50. 5 mils or .005 is closer to what firms like IB charges. The funny thing is, just 2 years ago it was common for day traders to pay over .01. These lower rates are all very new to most traders.
So, you have been paying $0.20 when you buy 1000 shares for 7 years? I've spoken to many prop firms over the past few months getting to know them. The rates THEY pay that they mark up to their traders is higher than that, and they are CBSX members buying bulk rates. If your zero is in the right place, good for you. Even $2.00/1000 is much lower than most active trader pay unless they are doing Big volume.