Is it wise to open a brokerage firm now ?

gjgjgj · #1 9th January 2007, 02:01 PM

Hello,

My name is Gaurav. I have been lurking in traderji.com forums for the past 1 year or so but never got around to posting anything useful.
I have this dream of opening a nationwide brokerage firm. My educational background is in Computer Science ( I have a Masters in Computer Science from the USA) and naturally I would want to have a brokerage firm that is heavily reliant on technology.

The question that I want to ask now is " IS IT WISE to open a brokerage firm now" considering the fact that so many discount brokerage firms have opened up and commissions are coming down like crazy and everybody is actively targeting ACTIVE TRADERS !

I do have a lot of ideas about the brokerage firm and would like to share them with the community here at traderji.com.

A frank assessment would be really appreciated.

Thanks in advance,
Gaurav

Mohan · #2 9th January 2007, 03:46 PM

If you have the necessary resources to provide a better service than the existing brokers and are confident of delivering the same then you can be successful.

rajib333 · #3 9th January 2007, 04:14 PM

western brokerage firms like e-trade, expresstrade etc can
be a good model. just my view.
Rajib.

gjgjgj · #4 9th January 2007, 06:22 PM

I have the necessary resources.
That is not the problem... The problem is the niggling doubts...

1) what if nobody signs up ?
2) what if nobody trusts me to put his or her savings ?
3) what if everybody is satisfied with his or her broker and nobody wants to change his broker out of inertia .

Do you think people would be willing to sign up if they find out a new brokerage firm with extremely low commissions and great customer service

I really need some good advice and encouragement..

Thanks in advance,
Gaurav

ratan jain · #5 9th January 2007, 06:51 PM

do you have about 50 crores plus to pump in for a nationwide launch? setting up offices in about 10 to 15 different locations?

About 5 to 10 crores for a national 2 week or so ad campaign?

And above all, the capacity to wait for 3 years for the profits to roll in?

If yes, then go deeper into this, otherwise, forget about it...

If you are SO unsure about getting clients, then u should not even THINK about it

SORRY to sound so rough and rude, but this is my humble opinion....I do not mean to hurt either you or your feelings..

best regards.

PS: If i had to choose a broker i would choose one whose name was VERY highly in various trader forums like traderji.com.

gjgjgj · #6 9th January 2007, 07:02 PM

I am not at all hurt. I take it in a positive fashion.

Well the doubts will be there TILL I get the first customer, but the key issue is my belief that I can change the industry with new software tools and using technology, reduce the working capital requirements to a large extent.

How does one come up with a figure of 50 crores. Can it be done using lesser than this amount. I am sure many "mom and pop" brokerage firms started out with much lesser. And why go national in the beginning, go regional to start with ..and with the money you make, go national. Take baby steps. Later start RUNNING.

Now the question that comes to my mind and the one that I want to pose in front of all traderji members who are reading this thread, what is the ideal level of DEEP DISCOUNT brokerage (both for CASH AND FNO) that a startup firm should start with.

While answering this question , please answer from the point of view of an entrepreneur and not from the point of view of a trader. Please do not say FREE coz that wont be possible.

Thanks in advance,
Gaurav

rajib333 · #7 9th January 2007, 07:17 PM

as i trade mainly in options, i feel option brkrage calculcualtion should be done with fixed rate,
rk global model is a good example.
Rajib.

milind857 · #8 9th January 2007, 07:22 PM

Quote:

Originally Posted by gjgjgj

I am not at all hurt. I take it in a positive fashion.

Well the doubts will be there TILL I get the first customer, but the key issue is my belief that I can change the industry with new software tools and using technology, reduce the working capital requirements to a large extent.

How does one come up with a figure of 50 crores. Can it be done using lesser than this amount. I am sure many "mom and pop" brokerage firms started out with much lesser. And why go national in the beginning, go regional to start with ..and with the money you make, go national. Take baby steps. Later start RUNNING.

Now the question that comes to my mind and the one that I want to pose in front of all traderji members who are reading this thread, what is the ideal level of DEEP DISCOUNT brokerage (both for CASH AND FNO) that a startup firm should start with.

While answering this question , please answer from the point of view of an entrepreneur and not from the point of view of a trader. Please do not say FREE coz that wont be possible.

Thanks in advance,
Gaurav

But NSE is going to take over the business of brokerage in next 4/5 years or so.
As my friend wanted to open the same but when he heard this news he gave up...

Thanks,
Milind

ratan jain · #9 9th January 2007, 07:26 PM

have u thought abt trading for ur own account?

u sound determined...thats the attitute traders need

ratan jain · #10 9th January 2007, 07:27 PM

regards brokerage, something like fixed brokeage, irrespective of size of order, like in us, they charge x $ per trade, irrespective of quantity.

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