Trading Professionally

General
1

if i want to trade professionally in indian stock market then :

  1. what kind of a company i have to open or register (like a trading company or a hedge fund) ?

  2. what are the SEBI rules regarding the company ?

  3. can i use my own money (like 1-5 cr borrowed from a friend or managed from somewhere) OR do i actually have to ask investors for funds ? if so then what are the details about taxes and profit sharing with them ?

  4. what could be the disadvantages of such a company …

  5. books pdf etc which could be really helpful for setting up such a company and the strategies that are used by them (like high frequency trading)

KARTHIK NITHIN you got to put some light on this topic as before opening ZERODHA brokerage you were also trading professionally (i guess i read it in a module on VARSITY)…i want to know whether there is a future with trading good volume or not … i just keep thinking about some institutional automated trading and other time frame traders who enter big on support and resistances … can i also become such a trader or not ?

thankyou

2

  1. If you want to trade with your own money, there is no need of registering any company. You can do this with your individual account.

  2. If you want to manage other people’s money, you have to start either a hedge fund or get a portfolio management license. Check these links: http://www.sebi.gov.in/cms/sebi_data/attachdocs/1293006463914.pdf and http://www.sebi.gov.in/faq/faqpms.html

  3. You need the above registrations only if you raise money from others. Profit sharing can be any way you wish, as long as you can convince the people investing through you.

  4. Disadvantage with hedge fund is that minimum size is 20crores with individual investor having a minimum 2 crores. With PMS license, you can use F&O only to hedge.

  5. Check out the links I have shared on SEBI website.

There is a future for trading as long as you can make money trading. So I’d say unless you are able to trade profitably for atleast couple of years consistently, don’t take money from others.

1 Like
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No Answer !!

4

thankyou NITHIN :slight_smile: