http://www.finra.org/investors/day-trading-margin-requirements-know-rules Why the change? The primary purpose of the day-trading margin rules is to require that certain levels of equity be deposited and maintained in day-trading accounts, and that these levels be sufficient to support the risks associated with day-trading activities. It was determined that the prior day-trading margin rules did not adequately address the risks inherent in certain patterns of day trading and had encouraged practices, such as the use of cross-guarantees, that did not require customers to demonstrate actual financial ability to engage in day trading. Most margin requirements are calculated based on a customer's securities positions at the end of the trading day. A customer who only day trades does not have a security position at the end of the day upon which a margin calculation would otherwise result in a margin call. Nevertheless, the same customer has generated financial risk throughout the day. The day-trading margin rules address this risk by imposing a margin requirement for day trading that is calculated based on a day trader's largest open position (in dollars) during the day, rather than on his or her open positions at the end of the day.
Yes. and I have settled about 6 cases since the prop firm days, which was a LONG time ago, for well over a $1,000,000 each (some with other law firms with fee splitting) and one was for 3.86 million, and countless other large fee cases. Same is in IRA and 401(k)s. Did I have grey hair back then? Now I am looking for some public interest work to do in semi-retirement; and the PDT has always been a pet peeve of mine. You get it now? LOL So... unless you have an interest in helping us out, which would be great, please go make some more money or teach another class.
The PDT rule would be a lot better if it prohibited leverage, but allowed settlement margin. There have been a ton of traders hurt by the PDT rule. It's hard to believe the amount of people that will take a position in a volatile stock knowing they'll have to hold overnight. But they knew the rules before entering the position. So it's hard to feel bad for them. Good luck to you @iceman1.
Robert, You're not a member of FINRA? If you are can you take a peak at the minutes from 2001 or aks them to send you a copy. The minutes of NASD from 2001 show why the PDT rule was enacted. Here's why: it was "parens patria" essentially. The government trying to stick it's nose into others affairs and protect them from themselves. Read the minutes. But the underlying reason was to help out professional traders from getting hurt by SOES bandits and the like during the bubble building days. IMHO.
LS a b s o l u t e l y right. I want all the traders hurt at some point by PDT to sign on as members of a class and/or plaintiffs.
We are regulated by FINRA as are all Broker dealers that do business with the public. I can't do what you are are asking me to do. you will have to contact FINRA and ask for that.
How does one get "hurt" by PDT. It "restricts" your ability to make more than 3 daytrades in a 5 day period. How does that "hurt" you? Can you give a specific example. You will be asked for this in court so you surely have some generic examples.
Come on. You are so smart. Can't you understand how harmful this rule is? I am so disappointed you don't see that. What if the next market wizard wants to open an account for 20,000 and qualifies for level 3 approval based upon income. experience and/or assets. Why should he or she have arbitrary restrictions like "3" days trades" or a " 90 day lock out" etc. OR the broker can decide not to issue such approval. Why should this (next) market wizards's trading be constricted and inhibited?! It's unconstitutional and without a reasonable basis for such discrimination, Mav74. You do believe in the law, justice and the US Consitution. Right? Please tell me you do not think only money talks; or that we are a Nation of men and not a Nation of Law.
What exactly did I post that was illogical? Your insistence that everyone has some kind of inalienable right to margin seems unsupported. Not necessarily unsupportable necessarily, just unsupported by you at this point and it's a crucial requirement without which you're just an old man yelling at clouds. Me pointing that out, while it obviously bothers you, doesn't seem like a lack of logic. Perhaps you can educate me, seeing as how I'm not that smart and all.
I actually don't. In court you better be really careful what words you use. I see the rule as "restrictive". Not harmful. Harmful implies the rule's existence causes one harm by it's own existence. I don't see how that is possible. Rather the rule is a constraint. I can't think of any way in which a "constraint" on anything can cause action, in this case harm. I'm all ears though. Walk me through it.