Legal Question in Business Law in New Jersey

Re: law/rules around trading options by retail investors

You can do that if you are a registered securities broker as defined by 15 U.S.C.A. � 78o. That means that you must comply with eligibility requirements that include passing tests (two, I think) and apprenticing with another broker.

If you do read that statute, don't be led to believe that you don't have to register because you are just working interstate and online. The limiting language in the statute is so that it comes within the ambit of the Commerce Clause of the US Constitution. That is interpreted very, very broadly. If you use the mail, telephone, or Internet, you are using an instrument of interstate commerce. If your trade is made on a stock exchange, you are using the facilities of the exchange even if you don't make the trade yourself.

You will also probably find that reselling any trading services that you purchase from an online vendor violates your agreement with the vendor. That means that the vendor will cut you off as soon as it is learned that you are reselling the services. That will leave you without the ability to trade. That's not a good position for a broker who is subject to suits for negligent trading.

See also: http://info.corbettlaw.net/lawguru.htm