i really don't think people should be daytrading with 401k money or accounts. it's a tax thing. the regulators shouldn't allow daytrading or even margins in 401k accounts in my opinions considering 80% of retail traders lose money. daytrading is a pros game.
people who invest long term in their 401k are more successful than daytraders percentage wise or make money. only 20% daytraders who enter the game stay in the game.
You can day trade in an IRA as in buy and sell a stock in the same day. But the cash doesn't settle for 3 days, so you probably won't be able to buy and sell multiple times a day unless you have a very large account. I totally disagree with tradersboredom. In these volatile markets I've found day trading and swing trading a very effective way to grow the accounts as opposed to sitting in cash or buy and hold. For example, the long term investments we've had for years in our IRA's pay dividends, but are down 20%-30%. The DRYS positions I put on 2 weeks ago @ 3.48 are up 165%. I also have traded MOS recently both intraday and swing for a gradual buildup of profits. Again, just be careful that if a trade has used most of the cash in your account, you wait 3 days for it to clear and allow you to trade again without the 90-day restriction kicking in.
You can daytrade stocks in an IRA's all you want. Just gotta have $25k in it, like any account to avoid the PDT rule. No margin either in IRA's. I know that IB lets you get around the 3 day settlement rule too, I'm sure others do the same. No shorts though for stocks. You can around this by trading inverse ETF's. And of course, trading futures avoids the balance/PDT/shorting things altogether.
You contradicted yourself when you said you have to have $25k and followed it up with no margin allowed. Either you have a margin account and need 25k to satisfy PDT rules or you have a cash account with any $ amount in it and the PDT rules don't apply.
Under the old rules in 2000-1, where I could roughly trade twice my account in a day, I went from an average security holding time of about 8 years (cashed out at NASDAQ ~2500) to swing and day trading, and doubled my IRA in a very down year, mostly in NYSE metal stocks e.g. NEM, PD. My tentative verbal understanding of several brokers that I recently asked, is that starting from "clean cash", aged T+3, with "IRA margin" accounts, not just the basic IRA cash account, you can legally fill your account with stock A (etc), sell A(etc), buy B, but have to wait to sell B (second $ use) until tomorrow. Or that if you buy B tomorrow it's all clean cash, although strict definition seems to be that you can't (not supposed to) round trip again until T+3 on proceeds from the sale of stock A. The broker indicated there is no limit on the number of stocks you can buy / sell in a day in IRA, because it is not the regular margin account where 25k is required. I just started trading again (I prefer downer markets). I rely on the broker's purchase power figures for my IRA. If someone has more perfect information, please share.
Yeah, that wasn't real clear. Sorry. No matter what type of account you have, whether cash or IRA, you need $25k in it to avoid the PDT rule. AFAIK. So if you have $30 in a cash account and get 2:1 margin, you can buy/sell up to $60k in stocks. And if you have $30k in an IRA account, then you can buy/sell $30k in stocks since no broker will give you any margin in an IRA.
You can also short stocks in IRAs by purchasing puts, which gives you great leverage and very limited risk.
I think different brokers have interpreted this differently. IB lets me daytrade all I want in my IRA. The way I understand it, while they can't "loan" you margin money to increase buying power, they will "loan" money so you don't have to wait for the 3 days to pass. What that means is if you have $30k in your IRA, at no time will you ever be able to hold more than $30k in securities, but you can churn it all you want.