Need help on legal issues. Can I charge people for my stock picks???

Discussion in 'Trading' started by fridaysignguy, Apr 25, 2011.

  1. Hi everyone,

    I need some professional help...

    I was checking out the basics of day trading and came up with a little "system" that I felt can get 0.1% interest per day. After a month and a half of fantasy trading, I have *never failed* to make the 0.1% on each and every trading day.

    I met a guy at a local pub who said he is a day trader and simply didn't believe me. ...whatever... But he said people will be willing to pay top dollar for my stock picks if I can prove that my picks are consistent.

    Since I have no money and am completely broke (bankrupt in fact), I have decided to set up a website disclosing my picks at 9:15am EST to paying members.

    Only question.... is that legal?????

    Any help will be appreciated!

  2. mrkmcknz


    I don't know how right I am but I think if you were to charge for access to a live feed of say your trades on a website and under no circumstances act as an adviser then people would be paying to view you trading account. The same as someone posting live trade calls on a forum I reckon.
  3. the1


    If you are hypothetically trading commodities or futures you are required by law to post CFTC Rule 4.41. If not, let's move along.

    If you are trading stocks and your results are hypothetical there is no requirement, to the best of my knowledge, that you post any type of disclaimer that your results are hypothetical. You can call your results a "Model Portfolio" and put some sort of risk disclaimer on your website.

    Perhaps the most important thing you need to do is form an LLC or S-corp and run every shred of activity through this entity to limit your personal liability. You can't ever sign any piece of paper that has your name on it without the name of the LLC or your corporate veil can be pierced should your "never failed" system suddenly fail. This is pretty important because there is no such thing as a "never fail" system.

    Disclaimer: I'm not a laywer
  4. that .1% in fantasy trading is just fantasy... fills/ slippage will cost you that
  5. bln


    That will make you 25% compounded in a year. Pretty lousy to be day trading with that high turnover of capital.

    Commissions and negative slippage is accounted for I hope. Why not verify it with some real money, just a small sum like $5,000 would be enough to test it out.
  7. emg


  8. This is both funny and sad at the same time.