Starting a company like ScottTrade/Ameritrade/eTrade when you're 21...stupid?
My friend had an idea today -- he has a contact with a european bank that supplies insurance, leverage, real time quotes, and basically 100% of the technology to start an online brokerage like ScottTrade and is willing to lease the technology to us for free provided we give him a cut of our customers' monthly subscriptions. All we have to do is come up with our own website, business name, and office (the only start up costs since they took care of the tech stuff). The customers would basically login to our site just like they would on ScottTrade and deposit money (the money would be deposited into the partner bank) and pay a subscription and trade.
When you read that, do you think "WTF are these kids thinking?? Stupid." or do you actually think it might be possible? I'm obviously a rookie at this and don't know what we'll be in for. Do we need an expensive lawyer to fill out any SEC forms?
Anyone have experience with this or have any stories to tell? We're only in college so obviously we aren't old enough to have any proper judgement about this specific type of business.
What makes you think you can beat ScottTrade, E*Trade, Charles Schwab, TradeKing, ThinkorSwim, Zecco, and the 100 other brokerages that have marketing budgets 100x larger than yours?
I have no idea about the procedures, and I assume dealing with SEC and other regulator will be costly..On the other side, even if it wont work out, at least you will get something to talk about during an interview! If you can pull this together..sounds very impressive considering age etc..Good luck!
is there any other avenue you could travel utilizing your "unbelievable" resources? The markets saturated with TD and Etrade etc
Realize too that a lot of these places are owned by prop firms that act as market-makers as well (Timber Hill, Citadel, etc.) and run these extremely tight since there are secondary ways to make money off their customers other than just transaction/account fees.
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