Starting a Business

What It Takes to Become a Successful Online Broker-Dealer

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A career as an online broker-dealer can be very appealing to anyone who is passionate about the stock market. However, it is important to understand that there is big difference between online trading and online investing. While the internet will help you save a lot of time and keep un with fast-moving markets, in order to make big money from this career, you still need to put in some elbow grease and do the raw research. Moreover, if you don’t want to work for an existing firm and you want to establish yourself as an independent broker, you need to be prepared to invest a lot of time and money in this endeavor.

Dealing with the challenges of online trading

  • Fast moving stocks – In an online world, you can make a trade in less than a second, but you must do a lot of research before you press the buy button. It is particularly important to take some time and see how trading changes and evolves in fast moving markets, and put together a good risk management system to protect your investments. With fast stocks, it is essential to set price limits. You can do this either through market orders or limit orders. The safer way is to place a limit order to that you can set a price limit for your investment. You can place either a buy limit order, which will be executed at the limit price or lower, or a sell limit order, which will be executed at the sell price or higher.
  • Time issues – We all know that time is money, but this saying is particularly important in the online trading world, where even a nanosecond can make a difference. To establish yourself as a successful broker-dealer, you must do everything in your power in order to minimize the chances of order lags. This includes everything from owning quality hardware, working with a great internet service provider and owning a great online trading terminal. However, as much as you try, you can never fully avoid time issues in online trading, so you must establish a great risk management system that will protect you when your other safety measures fail you.


  • Software choices – A broker is only as efficient as its software, so you need to put some time and effort into choosing the right online trading terminal. If you are looking for an easy to use, customizable terminal that can easily integrate with most 3rd party trading tools, we recommend the ETNA online trading terminal. This tool is great for
    independent dealers and trading firms as you can customize the interface to match your broker identity. Moreover, it is mobile friendly and data agnostic, and it has a great back office system that gives you full control of every aspect of your business.

Broker-dealer career steps

While career paths can be different for each individual, it helps if you have a good plan in mind to prevent problems and delays.

  • Start of as an independent contractor– This is a great way to ease into this career, as it will give you the opportunity to learn all about filing taxes and tracking your earnings, thus eliminating some of the risks of being an independent broker.
  • Financial planning–You will need at least $50.000 to start your own business, and at least twice as much if you plan on trading for your own accounts. For an exact idea of your future expenses, you must take into account the FINRA registration, the state registration, consultant and employee costs and deposits to clearing firms.
  • FINRA registration – To become a member of FINRA, you will have to jump through a lot of hoops and prepare a heavy documentation. Aside from a good business plan, and anti-money laundering program, you will also need several broker forms, your sources of capital, a description of supervisory procedures, and copies of your agreements with different financial entities.

About the author

admin

Rupesh singh is freelance writer.

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