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How Do I Become Authorized to Buy/Sell Securities as an Individual?

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posted on Jan, 15 2018 @ 04:39 PM
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ATS members who are more well-versed than I in terms of securities and the capital markets... I have a few questions I'm hoping someone may be able to help me with. I have 4 specific concerns I'm hoping to get some guidance on:

1. Licenses
If I wanted to be authorized to buy and sell securities like equities and commodities, or even derivatives how would I go about doing that? I'm sure it would depend on what types of investments I want to trade. I want to trade things like individual stocks, but also mutual funds, and things like certain commodities and other paper markets like the paper forms of silver and gold (although I much prefer the hard assets).

2. Individual Trader as Opposed toWorking for a Big FirmI have a sibling who is a Financial Planner for one of the bigger Investment Banks, but I am talking about if I wanted to individually trade these investments on my own without having to work for one of those firms, what exams would I need to take and would I need to open up my own LLC or sole proprietorship to trade?

3. Trading Software/Platforms? I'm also wondering if I would need a particular type of software or other computer applications to do this. I do just fine monitoring the markets using features such as "Watchlist" on MarketWatch, but I would probably want to buy a full packaged software if I were to move into securities trading as more of a primary source of income. Does anyone know of any packages of software that would be good for this as well?

I know you can use ETrade or other similar services to dabble in these things, but the fees are astronomical.

4. Any Forums or Online Resources for Members of the Investment Community? I am licensed in Insurance and have used a resource called Insurance-Forums.com to pick the brains of other professionals. I'm wondering if there is a similar resource for this aspect of the Financial Industry. Has anyone heard of anything like this before?

P.S. I live in the US (thank you DISRAELI)

Any assistance or suggestions from my fellow ATS members would be greatly appreciated. Thanks in advance! Your friend, FamCore.


edit on 15-1-2018 by FamCore because: (no reason given)




posted on Jan, 15 2018 @ 04:43 PM
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a reply to: FamCore
Which legal jurisdiction do you live under? Anyone who can advise you (I can't) will need to know that.



posted on Jan, 15 2018 @ 05:06 PM
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a reply to: DISRAELI

Thank you for pointing that out - good point, a very important detail



posted on Jan, 15 2018 @ 05:11 PM
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Etrade or TD Ameritrade or equivalent.

Equities,forex,Options,ETFS.

Each has their own software.

No license required.



posted on Jan, 15 2018 @ 06:11 PM
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originally posted by: FamCore

1. Licenses
If I wanted to be authorized to buy and sell securities like equities and commodities, or even derivatives how would I go about doing that?


If you're trading for yourself, you don't need licenses nor exams.

However, you can't trade commodities unless you meet certain financial and maturity requirements. This is set by the brokerage firm you select to trade through. Generally speaking, you must have some minimum capital, and may be required to demonstrate experience trading other things like stocks, before they let you trade commodities.

The easiest to trade are stocks. And you can "buy" bonds, no problem. To sell "bonds" or even sell "stocks" that you don't own, i.e. to "short" these things, again you need to show some substantial financial capital before they'll let you do these things.



I wanted to individually trade these investments on my own without having to work for one of those firms, what exams would I need to take and would I need to open up my own LLC or sole proprietorship to trade?


You need licenses and exams only if you want to trade other people's money. So, to let your friends give you some of their money to trade for them, because you're a wiz at trading, you'll need to be licensed. If it's your own funds, you don't need any license, but should take the Series 7 Exams in North America, for your own education, anyway.



3. Trading Software/Platforms? I'm also wondering if I would need a particular type of software or other computer applications to do this. I do just fine monitoring the markets using features such as "Watchlist" on MarketWatch, but I would probably want to buy a full packaged software if I were to move into securities trading as more of a primary source of income. Does anyone know of any packages of software that would be good for this as well?


There are different kinds of trading, depending on your "time frame" holding positions.

Day Trading:
This is one of the hardest type of trading, where you hop in and out of the market in a few minutes or hours. You need special permission to be authorized to do "day trading". If you register for a general brokerage account, to trade stocks, say, and begin to do alot of day trades, the broker my freeze your account, and not let you trade. So, read the fine print.

Scalping:
This is another one of the hardest type of trading, where you hold positions for even shorter periods of time, from milliseconds to a few seconds or minutes. Many brokers forbid this type of trading and will close your account if they find you doing this. But, some brokers allow it. Read the fine print.

Arbitrage:
This is where you go long one security and short another, if you try this at some brokers, doing both long and short positions in your account, the broker may kick you off their system. Again, read the fine print. Some allow this type of trading.

Trading has many many aspects, I just mention a few things.

For derivatives, you can trade "options" on stocks, and "options" on futures, if you have the capital requirements. To "write" options, i.e. take a short position in the derivative, you need lots of capital and special permission.

You can't trade OTC derivatives, unless you are a corporation with lots of capital in the millions of dollars. So, you'll have to stick with ordinary options on stocks and futures.


Oh, by the way, some brokers are required by law to only deal with "Sophisticated Investors" when offering their services, so you won't be able to buy and sell certain things as an "Ordinary Investor", and will have to demonstrate prior experience trading things, and substantial capital to be able to trade those securities being offered to the "big guys."



edit on 15-1-2018 by AMPTAH because: (no reason given)



posted on Jan, 15 2018 @ 06:12 PM
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a reply to: neo96

Do you personally use any of those platforms? Are there high fees or "minimum" amounts you need to be trading/have invested in a certain pick in order for their service to allow it?

It sounds like from your post I wouldn't need a license unless I was actually buying/selling securities for someone else. If so, that's exciting to hear. I'd love to hear from your own experiences if you do this yourself. Thanks for your help Neo!



posted on Jan, 15 2018 @ 06:12 PM
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You would have to get a security dealers license,same as a stockbroker



posted on Jan, 15 2018 @ 06:13 PM
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Fidelity Investments!

I recommend staying away from margin trading. If you don't have the cash to buy a product, don't. Margin trading can get you in far over your head really quick.
edit on 15-1-2018 by CharlesT because: (no reason given)



posted on Jan, 15 2018 @ 06:15 PM
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a reply to: FamCore

I have an brokerage account at TD Ameritrade.

I trade stocks.

$6.95 flat fee for buy and sells.

I like Trade Architect quite a bit.

www.tdameritrade.com...

No minimums.

You can buy 1 share if you want at what ever price.

edit on 15-1-2018 by neo96 because: (no reason given)



posted on Jan, 15 2018 @ 06:16 PM
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Day trading can get ugly no matter how experienced. Better odds at the holdem table or sports book.




posted on Jan, 15 2018 @ 06:23 PM
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The number one thing to know is the RULES.

$25,000 account minimum for round trip trades.( This doesn't stop you from buying into a position)

That's basically buy and selling a position in a single day.

Limit is 3 or less in a week time period.

If you buy a position and sell the next day that doesn't count as one.

It's kind of a hassle but not really.

If your account has more than $25k don't have to worry bout it.

Always read the handbook for whatever brokerage you choose.

This is if you get a cash account.

I don't do margin trading.
edit on 15-1-2018 by neo96 because: (no reason given)




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