How to become a broker or start a brokerage company?

traderwiz · #1 4th June 2008, 09:46 PM

All,

I am trying to find out the costs involved in becoming a member on the NSE to trade futures and well as equities. Does any body know how?

1) Is there any such thing as buying or leasing a seat? If so how much does it cost to buy? or lease?

2) What are the benefits of being a member on the NSE? If a trader is doing lots of volume, then can the cost of leasing or owning a seat be justified? I am trying to find out, at what point (i.e. the break even point) should a trader consider owning a seat on the NSE?

3) Is it true that if you are a member then you essentially trade for free? I mean, then there is no such thing as paying 0.03 paisa per share or any thing like that. Moreover, if you become a clearing member, then you can also place trade for others? Can some one enlighten me on this matter?

Thanks to all.

Rgs,

Traderwiz

mahesh2007 · #2 5th June 2008, 09:43 AM

Quote:

Originally Posted by traderwiz

All,

I am trying to find out the costs involved in becoming a member on the NSE to trade futures and well as equities. Does any body know how?

1) Is there any such thing as buying or leasing a seat? If so how much does it cost to buy? or lease?

2) What are the benefits of being a member on the NSE? If a trader is doing lots of volume, then can the cost of leasing or owning a seat be justified? I am trying to find out, at what point (i.e. the break even point) should a trader consider owning a seat on the NSE?

3) Is it true that if you are a member then you essentially trade for free? I mean, then there is no such thing as paying 0.03 paisa per share or any thing like that. Moreover, if you become a clearing member, then you can also place trade for others? Can some one enlighten me on this matter?

Thanks to all.

Rgs,

Traderwiz

To start a brokerage company requires too much capital, probably u are thinking of becoming a sub-boker.
For that first pass NCFM exams for Dealer and F&O or manage to get a person who has cleared these exams.
Id shall be issued only in the name of the person who has cleared these exams.
Then contact brokerage co.'s and choose a one which offers a good deal.

moneygurukul · #3 5th June 2008, 02:39 PM

Quote:

Originally Posted by traderwiz

All,

I am trying to find out the costs involved in becoming a member on the NSE to trade futures and well as equities. Does any body know how?

1) Is there any such thing as buying or leasing a seat? If so how much does it cost to buy? or lease?

http://www.nseindia.com/content/memb..._newmember.htm

Quote:

2) What are the benefits of being a member on the NSE? If a trader is doing lots of volume, then can the cost of leasing or owning a seat be justified? I am trying to find out, at what point (i.e. the break even point) should a trader consider owning a seat on the NSE?

Developing a broking business model only will justify the cost of leasing a seat.

Quote:

3) Is it true that if you are a member then you essentially trade for free? I mean, then there is no such thing as paying 0.03 paisa per share or any thing like that. Moreover, if you become a clearing member, then you can also place trade for others? Can some one enlighten me on this matter?

Thanks to all.

Rgs,

Traderwiz

Yes, it's true.

traderwiz · #4 5th June 2008, 04:42 PM

Thanks. I am just trying to compare the American system with the Indian system....after all whatever happens in the U.S. happens here in India. First in America, there was this "freedom of information act" and even in India they have it now. Later in America they had this so called "patriot act" and now after all the terrorist bombings, India is trying to copy that too. In the U.S., for a high volume trader, a person can lease a seat on a futures exchange for as low as $1000 or some thing around that. You would still pay a very low commission per trade i.e. brokerage. For an intra day heavy scalper like myself, I think I am trying to evaluate all the options to bring down the cost of doing business i.e. brokerage.

traderwiz · #5 5th June 2008, 04:45 PM

I am wondering how come the prop model has not happened in India. In the U.S. you have all this prop shops (proprietary trading groups). Actually, they could give you all the money to trade in exchange for a cut in the profits. So lets imagine this:

You get a job where you trade and the company puts up the risk capital
In return they take a percentage of the profits. For freshers the pay out rate is 30% and it could go as high as 60% for senior traders.

How come there are no jobs as a trader in India? I mean there is no such thing as a prop group or a proprietary trading group where they trade for their own groups profits? Any one care to enlighten me?