Sorry if I missed it in the thread, but did you mention what software you would provide, and would there be an API? If so would there be extra costs of executing through the API?
Thank you all for your responses...Will keep all interested parties advised...am interested in your feedback....
Who is going to guarntee the traders money? How can a trader use $1 Mil or more (minimum needed, as you are well aware) without risking the other traders money..?/ As I said, check the other firms who have attempted this before, most have had to rethink the plan. As for me, I hope you can do it...it just may be an incubator for traders to learn about trading before moving on...I await your announcements... Don
Thank you for your responses.... Firm's structure is very simple.....and we will take full advantage of the internet's capabilities... By the way...I was in the brokerage business when we had squawk boxes telling us what to do...to be a broker you needed to be at least 30 years old...you sent orders by pneunamic tubes...and bought the order clerk lunch now and then so she would put your orders in first...Brokers who made a lot of money built large books of positions of blue chip stocks...and I saw most of what went on....vague monthly statements....squawk box conference often suggested people in retail sell when institutional bought...when quotron came about you had single live quotes...it was some time before you saw dynamic matrices changing...The retail brokerage basically went to hell when brokers monthly pay went to 100% straight commission...Young brokers would work day and night....knowing that the last no they heard was closer to a yes...that is..if your father wasn't a broker in the same firm...etc...etc... Without a doubt...the internet has changed the equity side of the business...forever...for a lot of good reasons.... I am particularly enamoured by thinking that exceptionally high returns are found in small packages...some small hedge funds deliver for a while...then don't deliver...adapt or lose... I think that there are some individuals around that can continually deliver to this model...when their total welfare is at stake... Let's put it this way...I am not new to the game...and whereas everyone wants to be the house...nothing wrong with it....hell, we're in America...the internet makes you free worldwide while delivering the lowest costs...let's see what the hell happens with this model...let's give the client every possible decent advantage to producing a profit...it's kind of like being a democrat vs republican argument...we can tax you more and hope things turn out better for you..or we can tax you less and hope things turn out better for you...I'm willing to bet on less taxes create better individual results... Tuition mostly covers software costs...training is via the internet whose foundation are actual daily trading blotters..with the pictures and explanations...simulation...delayed data...then to small lots with live data...students pay tuition but are not made promises or inferences from hypotheticals...no advertising costs in the trading costs...traders basically pay cost of clearing to the firm....no large bricks and mortar overhead...traders and aspiring traders live and work wherever they please...the bills are paid with the profits generated... The firm has significant capital at risk...and rigid risk controls..... Like I said before...for those firms who are currently playing "I'm the best house" game....there are no barriers to entry to this model...whoever has the guts and know how...think about giving this model a try... Will keep everyone advised....
The "training school model" was used by Blcok Trading back in the 1990's, and again by a few people over the years. They, too, were under the impression that the 'fees" would cover software costs and all the rest...which it did for while...but as soon as the revolving door stopped (of new "students" who were not making money right away....you understand that it may take months or a year or two before any profits come) then they found that their $5,000 was gone, the traders were left in the lurch. I am curious as to where you are planning on getting the $100,000 per trader when they put up only $1,000-$5,000? Even if you "ignore" all the rules, that would be pretty tough, and you know what has happened to the "intraday loan" people. I imagine that you have an answer for this. I sure wouldn't think that you would expect to raise outside capital for something as extraordinarily risky as this...but perhaps you have another plan....(you do have my curiousity up...I gotta admit). Don
(in previous response) Tuition mostly covers software costs...training is via the internet whose foundation are actual daily trading blotters..with the pictures and explanations...simulation...delayed data...then to small lots with live data...students pay tuition but are not made promises or inferences from hypotheticals...no advertising costs in the trading costs...traders basically pay cost of clearing to the firm....no large bricks and mortar overhead...traders and aspiring traders live and work wherever they please...the bills are paid with the profits generated... The firm has significant capital at risk...and rigid risk controls..... Like I said before...for those firms who are currently playing "I'm the best house" game....there are no barriers to entry to this model...whoever has the guts and know how...think about giving this model a try... Will keep everyone advised.... ................................................................................................ Am familiar with Block..Cyber..RT...etc..most of the previous players who were the pioneers of the direct access movement....wasn't long ago when you paid dearly for an Instinet machine to get between the bid/ask...and arca was doing less than 15000 trades a day.... For those of you who started firms prior based on the "house model" if you look a little harder at this model...some things are not the same...as they were when they started..... Let's see what happens...
Very interesting Very interested You're welcome to send pm if you want Thanks to all for your input on this thread
Thank you for your responses...from the number of responses there seems to be some interest in this business model.... The proposed new firm is in the process of forming its own clearing and owning its own software...however will be very similar possibly to your current situation with REDI in the beginning... Of course clearing and software are two very important elements of heavy "front end" costs and need to be brought in-house at some point when the account sizes are relatively small... There are considerably more numbers of front ends now versus 1999...as well as clearing options which is getting more cost efficient... Transparency will be available to all customers in terms of costs and performances...all costs will be posted...blotters will be posted...no chat...no hype...just black and white transparency...