cost of spread betting system

[ouzhou]

hihi all,

does anyone know the cost of building up a whole trading system for a spread betting company? including online trading system(download version), server, DB, riskmanagement, CRM?

thank you!

 

[ns1000]

Multi millions. Just look at how much IG spend on IT every year just to maintain their system.

Of course you can buy something off the shelf which will do the job, but it's never going to compete with a professional bespoke system.

 

[ouzhou]

Thank you GJ, I just want to get a general idea of this market, I know the cost must depend on the detailed requirements.
Actually, I'm looking for any chance to enter this market, as a beginner, I have no idea of how high the threshold is, especially for the system cost, £1M? £10M? ...

 

[ouzhou]

Thank you ns1000, Multi-Millions every year on IT system, very useful information, thanks again.

 

[ns1000]

There's a lot more to it than just building a dealing system - regulation, minimum capital requirements etc etc. For an off the shelf dealing system, probably £1m - £2m. Then you have to add a back office system and risk management on top. Even at that, I would guess you'd have to throw at least £10m to get up and running. This would leave you with a functional, but hardly best in class system - how would you market it? fwiw if you're planning to open in Hong Kong, you'll never get a licence as the Jockey Club want to keep all betting house. This would leave you chasing unregulated business, competing on low margins and taking the exposure on your book. You'd probably be left with a massive bad debt risk.

A more serious option would be to speak to one of the existing providers about becoming a white label; that way you'd get to use a branded version of their system and split the revenue.

 

[Phil Mibbutz]

hihi all,

does anyone know the cost of building up a whole trading system for a spread betting company? including online trading system(download version), server, DB, riskmanagement, CRM?

thank you!

One of the existing SB cos apparently only spent about ten quid for the whole lot.

 

[ouzhou]

ten quid for the whole lot?

 

[ouzhou]

thank you for your information, NS1000, it's hard to do such business in HK. it is only regulated in Ireland as I know. anyway, it's interesting and attractive, your white label is quite useful, i may get to know more about it. thanks.

 

[Hoggums]

hihi all,

does anyone know the cost of building up a whole trading system for a spread betting company? including online trading system(download version), server, DB, riskmanagement, CRM?

thank you!

I'm a professional programmer. I'll do one for £10m if you handle all the legal/compliance issues. (I'm probably under selling myself here too...)

Thing to remember is it's not just about the front end that the punters use. You need all the functionality at the other side to support the dealers, sales staff and most importantly the risk dept. You'll need to develop interfaces to numerous exchanges for price updates and placing hedging trades - plus a settlement system for those hedging trades. Servers which are constantly monitoring all positions with every tick update to see if any limits/stops are taken out or margins to be called plus updating risk in real time. You'll need the very latest hardware to make sure that the lag from price update from the exchange to arriving at the spread betters screen is as small as possible and a host of monitoring software to detect if any punters are cheating the system somehow. As well as endless reports for compliance/finance depts etc.

It's not simple and will require many thousands of man hours to develop from scratch.

 

[ouzhou]

Thank you for your detailed information, Hoggums, I’ll take that into account., £10m includes all hardware and software cost?