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'm sure wouldn't think that you could 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). I'll keep my eyes peeled for your paperwork filings....all the best. 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...
Can you explain "tuition covers software costs"..?? Why are there software costs...software is provided to all retail types free of charge...are you giving them something else..? Does the clearing firm not have a front end? Don
on your website-in locations -i saw Cherry Hill. it in NJ? can i stop by in this office,to take a look and talk to the manager? can you give me this office phone number? Thank you!
I don't like to put office phone numbers on ET...(and my Compliance Officer is in the C.H. office...send me a PM, or call de at: 800.249.7488
Can you explain "tuition covers software costs"..?? Why are there software costs...software is provided to all retail types free of charge...are you giving them something else..? Does the clearing firm not have a front end? Don ................................................................................................... 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...
You're right about the Clearing options, and technology is leapfrogging all over itself it seems. Economies of scale are still the dominant factor in this industry...and when you can get several firms at one Clearing firm vs. self clearing, it makes sense that the costs can be lower (especially when we take the roller coaster rides that often happen in the market). Back to business... Don