Your place on the exchange: pros and cons, candidate requirements and cost
Some beginning investors are wary of stockbrokers, mistrusting the intermediaries who provide access to the markets.
It seems that if you have enough money and can directly participate in trading on any exchange, why pay a commission to a dealing center?
Nowadays, virtually anyone can purchase a place on the exchange and conduct transactions independently.
At the same time, you save significantly on commissions, the amount of which, with high turnover and a large number of transactions, can reach tens of thousands of dollars.
It's true that everything is simple only in words; in reality, there are a ton of conditions that must be met before you can participate in the auction:
Therefore, depending on which exchange you plan to trade on and how you intend to open trades, you may be required to:
Qualified investor status is a requirement not only for MOEX, but also for all brokers with a Russian license (more information on investor qualifications can be found at https://time-forex.com/vopros/kvalificyrovany-investor ).
Minimum capital – in addition to the fact that there are requirements for the minimum volume of a single transaction, there are also requirements for the minimum capital amount, usually this amount is not less than 100,000 US dollars:
Availability of a seat on the exchange – on foreign exchanges, you will need to purchase or rent a seat on the exchange. The cost of purchasing a seat can currently reach up to $3,000,000 – Wikipedia
If desired, you can rent a space to avoid paying a huge amount upfront; rental prices start at $50,000 per month.
Recommendations – in the financial world, money doesn't talk everything; to become a trading participant on some exchanges, you'll also be required to have recommendations from two current members.
It's safe to say that if you want to become an independent bidder, there are no impossible conditions. Yes, it's complicated, expensive, and not always profitable, and you'll likely need to consult a lawyer to prepare the necessary paperwork, but the task is entirely doable.
The main thing is to clearly understand why you need this. If it's to make money on stock exchange transactions, then the overhead costs can be much higher than the commission of dealing centers , and sometimes it will take more than one month to complete the paperwork.
Also, in my opinion, trading through a stock broker is much more convenient than trading on your own. Brokers offer the opportunity to trade a wide variety of assets—currencies, commodities, securities, indices, and cryptocurrencies.
If you are trading similar assets on your own, you will need to purchase seats on multiple exchanges.
In addition, there is now an excellent solution that eliminates broker intervention in the process of transmitting orders to open trades: ECN accounts - https://time-forex.com/vsebrokery/ecn-brokery In this case, trades are carried out in a fully automatic mode.
