Everyone has been talking about how you now need $25,000 to daytrade, but the actual monetary amount is much higher. Lets say you've got exactly 25K, well one bad trade or even one break-even trade counting commissions will put under the 25K level, meaning you can't daytrade. I'm guessing 30K or 35K will be the actual minimum people will need to daytrade, depending on the maximum drawdown period of individual trading styles. Newbies starting out will of course need much more. More pressure, just what a trader needs. Htrader
...or learn to play poker, in CA it's a neat living...... 20-40 the limit is only $500 (official limit is $200)per session. On a good day you make 200-300 in one hand and can sit on the Southern California beach. bankroll with 2-3 standard deviation is supposed to be a modest 10k-15k plus living expenses. Of course you keep records and pay your taxes
Generally, I'd agree, that 40K - 50K is the minimum needed if one daytrades for a living. However, say I don't need to daytrade for a living. I have several brokerage accounts and only one of them is dedicated to daytrading, but I don't want to commit more than 10K or 15K + margin to daytrading due to the risk involved,( still means buying power of 20 - 30K - enough for a parttime trader swinging 500 - 1000 share lots of 15 -20$ stocks ). I will now have to raise this daytrading account to at least 30K - but gaining buying power for 120K - much more money at risk if I use it completely. If I stick with my risk-level and don't commit more than the original 10K - 15K , I'd have 10K - 15K in my daytrading account gaining a measily 2-3% money-market interest per year, while I could use it for other investments more efficiently and, most probably with less risk. Instead, I will have to maintain a 25K minimum in a daytrading account just to have the freedom to daytrade as much as I want. What a ridiculous rule. Could be invented by a german bureaucrat. Can't see any of the intended "benefit" for the small traders in this new rule either.
You can hold some Junk funds (ETF) that pay up to %15,and some RE and you trade the rest of the 30k as a daytrader. It would be nice if one could elect a buy for cash only and not use margin which now is not possible!! When I had Fido account I could buy cash but it was just a farce - margin was floted as they in some computer decided. A Joke !!!!
With the 25K rule, the average person will have to not only sell their mom's car, but their grandma's too to raise the cash. And after the 4 to 1 margin wacks them one day, they'll also lose the house. Maybe they should require that people with declining day trading accounts have an SEC "guardian" sit next to them while they trade, and on every losing trade he can tell them how stupid they are. He could also disconnect their online connection if they fall below certain capital minimums during the day, or violate any SEC rules.
yeah, if they want to protect us from ourselves why don't they just require the Series 7 and jack-up the fee for taking it this way they get some of our $ and get the media off their back by displacing blame for any 'failed trader' stories (and also weed out anyone who can't pass the test) - all without doing damage to the retail brokers and eliminating some <25K traders who are actually doing OK