Some people don't have 25k in risk capital to trade QQQ, ETFs, etc. However, this rule does not apply to futures trading, where you can still enjoy leverage and not have to deal with uptick rules for shorting, as well as cash day-trading rules. If you want to daytrade other stocks, then you're stuck with this stupid rule (yes, this rule is stupid). I don't need the government protecting *my* money for me. They can't even balance their own checkbook -- what makes them think they know what's best for an investor / speculator? What is the difference between going to Atlantic City and daytrading -- obviously if I am good, daytrading is in my favor -- but from a general risk perspective, they are both risky endeavors (and ones that I would not want my government telling me how to use). Risk and reward are a ratio. You get rewarded for taking on risk. That's the whole principle behind trading and speculating. Someone has to provide liquidity for hedgers, arbs, etc. We are the ones who are slipping oil into the gears of this big machine. Again, if I want to lose my money, I should have the freedom to pick whichever investment vehicle I would most enjoy losing it in.
That is not what you've been saying in your previous posts. Maybe you should look at them again. Carl
Regardless of how stupid the reg is, there is a way around it. What stops the brokers from offering 1-hour settlement or 1-minute settlement or instantaneous settlement? Isn't the 3-day rule just the regulatory max? Is there a minimum settlement time???? Seems like it might be a new way for brokers to compete for smaller active traders. Even if the broker has to do settlement out of its own repository of shares (e.g., borrow the shares held in street name from another account), it might be worth it in terms of commission revenues. Of course SSFs make the whole issue moot, assuming they can be traded like futures in small-cap accounts.
CarlErikson , Carl, thanks for the comment. I stand corrected and I don't claim to be an expert on every rule. My last post as follows is correct according to my interpretation of the rule: In a cash account you do not get "time & tick" regardless of settlement date . If I have $10,000 in equity and I Buy $10,000 worth of Stock & then Sell $10,000 worth of stock(cash account) I am done for the day and I cannot trade again. This is a discussion forum and I don't warranty every comment. I would ask all traders to check with their firms compliance dept. for any questions on margin or cash accounts.In any case, most regulators and SRO's would agree with me that cash accounts should not be used for day trading. Again, I thank Carl for pointing out the error in my previuos posts. Any comments are welcome. Gene Weissman Lieber & Weissman gweissman@stocktrade.net
Aphidcoil- You're not an Elite Member yet? That's lame. Remember, like the moderator who came to your defense said: it's QUANTITY not quality. Now hit the keyboard.
I will say this about some of the day trading rules & regs.-even some regulators can get confused and any rule can be subject to interpretation. Keep it simple, don't day trade in a cash account. Gene Weissman Lieber & Weissman Sec., LLC gweissman@stocktrade.net
If you have a margin account, but never use that margin and never trade marginable securities, are you still exempt from this freeriding rule? Thanks, -Scalpa