The founder of a new online brokerage firm says he will be the largest trader in the country within six months.
By removing many of the regulations governing traders in Canada, the U.S. and Europe, the idea is to create an attractive offshore trading hub to short sell penny stocks.
Guy Gentile, the CEO of SureTrader.com, is also the creator of SpeedTrader.com, the U.S. online trading broker with $20 million per year in annual revenue. Inc. Magazine ranked it 703 on its 2011 list of fastest-growing private companies, with a three-year revenue growth of 451 percent.
However, Gentile told Guardian Business that SureTrader should be able to surpass its U.S. sister company through unique service offerings and the absence of certain regulations.
“We have been in business for three months and we should run in the black shortly,” he said.
“There is no question we will be the largest broker dealer within six months time in terms of the number of transactions per day.”
A veteran of the brokerage business for 15 years, the offshore brokerage markets primarily to tourists and individuals that live in The Bahamas but possess other nationalities.
“I came to The Bahamas because I wanted to build a brand here, as other businessmen I know have done the same on other islands,” he said. Gentile said his online platform has 30 active accounts and more than 100 in the process of being opened. At present, SureTrader facilitates 500 transactions per day and anticipates up to 20,000 in the near future.
One of the many attractive points, according to Gentile, is clients are not subject to the Pattern Day Trader Rule. Imposed by U.S. firms, investors with less than $25,000 are prevented from performing more than three day trades in any five-day rolling period.
Another advantage is the wide margin or leverage it offers clients.
“In Canada you can leverage 3:1, while in the U.S. it’s 4:1,” Gentile said. “We offer 6:1 to give our clients an edge. We’re also introducing a new product called Flexi-Leverage. It will give clients 20:1 leverage but forces them to diversify and hedge themselves. If you’re getting that kind of leverage, we don’t want you betting the farm.”
SureTrader.com charges $4.95 per trade for up to 1,000 shares, he said, making it a cheaper option than conventional online brokerages.
Gentile told Guardian Business the platform is open to all international investors.
He called the business a “numbers game”, with the focus on the quantity of trades rather than large sums of cash. There are currently five people employed at SureTrader, but Gentile expects this number to rise.
Timothy Sykes, an author, educator and celebrity Wall Street enthusiast, has emerged as a valuable ally of both SpeedTrader and SureTrader, sending the thousands of casual investors he had trained over the years to the online platforms.
“What we have done is ally ourselves with educators online, such as Timothy Sykes, and they push trainees our way.
We prefer not to be involved in investment advice. It doesn’t pay for us,” he said.