RAIN launches new flagship product, TradingRooms, aims to make active investing a community-driven endeavour

Many stock market traders, having landed themselves on the trading floor after years of trying to understand it, have exclaimed that, all said and done, trading is an incredibly lonely profession. Watching squiggly lines go up and down on a screen from 9:15 am to 3:30 pm is hard, but sometimes, a lack of colleagues or people who can relate to the struggle is harder, especially since the pandemic has forced people to operate in silos.

Upstox founder Raghu Kumar and hedge fund manager and AGacquisitions founder Harsh Agarwal want to change that. They feel that trading should be a more social activity than it currently is, given that, before the advent of laptops, smartphones, and high-speed internet, traders had to work together on the trading floor, and trading had an inherent social and collaborative angle to it.

To this extent, the duo’s startup, RAIN Platforms Inc, earlier this year unveiled an automated quant-trading product for retail investors where they could pick from a host of strategies published by individual brokers and traders.

The next step was adding a social element to it and opening up the platform to offer trading strategies beyond just algos — and that led to TradingRooms.

TradingRooms is essentially a platform that allows brokers, traders, and trading enthusiasts to create “rooms” that users can subscribe to, set up a trading strategy, and engage in discussions around trades and other miscellaneous topics.

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Users can browse through rooms, see the total returns a room has generated from its trade executions, subscribe to them if they appreciate the direction it’s taking, and plug in their online trading accounts to start executing the trades outlined by the room’s owner.

The platform officially goes live on December 18, 2021, after an online unveiling event, which will also see two panels discussing active trading that investors can tune in to.

How it works

TradingRooms is built like any other social media platform where users can follow each other and see what the people they’re following are posting on their homepages.

To discover trading rooms, investors can use a host of specific filters such as time period of holding (i.e. intraday trading, long-term trading, six months trading etc), the asset class (e.g. equities, derivatives, cryptos, commodities etc), and strategies, among others.

Once they discover a room they like, they can become a member by subscribing to it and paying a monthly, quarterly or yearly subscription fee — set forth by the room owner.

Being a member of the room gives users access to the trades the room owner has set up for members, which they can then go on to execute on their personal brokerage accounts. When the room owners revise, add or subtract any open positions, the trades automatically get executed on the accounts of all members — but investors can choose to exercise control over every single buying and selling decision if they’d like.

“TradingRooms is democratisation meets automating — we don’t force a single user, whether they’re a room owner or not — to do anything they don’t want to do. Every option, right from setting a subscription rate for rooms, to investors executing a trade is highly customisable and controllable by end-users,” Raghu tells YourStory.

The social aspect of the platform lies in its interactability. Members of a group can interact with each other via live chat, share videos, news stories and posts on the room’s page, and discuss trading strategies. Room owners can nudge members to rebalance their portfolios if they notice misalignments, as well as answer questions posed by the members, if any.

The room owners don’t actually trade the instruments they recommend to the room, but execute the simulations of those trades — which is helpful for users as they shop around for rooms, especially since those simulated trades help portray the sort of returns the strategy is helping generate.

Think of it as a series of hotel rooms. Each room the user enters offers them a different conversation and an array of comestibles to pick from. Users can pick and choose what they want to consume, and sample a myriad of such rooms. But in case they don’t want the burden of making those decisions, they can choose a ready-to-go platter, which consists of everything the room curator or owner has put together.

“It’s like a community, and each room has its own party,” Raghu quips.

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How it helps

TradingRooms not only allows brokers, traders, strategists and market operators to automate trades and monetise conventionally used mediums such as WhatsApp and Telegram where they often share strategies, but also make such services more accessible to end-users.

Retail investors benefit from a portfolio manager-like service at much cheaper prices, as well as become more active participants in the markets.

Harsh says RAIN’s decision to pivot to TradingRooms also had to do with the fact that RAIN Trader, the previously released proof-of-concept platform, essentially did not address discretionary traders who may want to use the platform to automate trading, but not open their services to the public.

TradingRooms allows room owners to set the room on public mode where they’re easily discoverable, or limit the platform to an invite-only, closed set of users. That could be helpful for brokerages and traders that have their own set of clients.

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Business model and future plans

The startup takes a cut of the subscription fee that room owners charge their members, which is its primary source of revenue. The company soon hopes to use some of the platform’s real estate to run ads — which, Harsh says, will be pocketed by the trading room owner, as well as TradingRooms.

Users don’t have to pay anything to access the platform — they only pay to subscribe to rooms. The platform integrates with online brokerage platforms such as Upstox, Zerodha, FYERS, and others. By the end of next month, the startup will add 30 more online brokerages to the platform.

Raghu says TradingRooms will soon offer video streaming services to help increase interaction on the platform and make it more social, as well as a news feed that will comprise curated content relevant to markets and trading.

The social media platform currently lets people trade equity, derivatives, and ETFs, and hopes to add commodities, currencies, and crypto by next month.

The startup is about to close its Series A round in the next few months. Its launch on December 18 is a widely anticipated event that will host top players in the space.

Raghu, who’s based out of Texas, says he hopes to launch the social investing platform in the US by next year, and add a second product to RAIN’s India portfolio soon.