They stopped it because it would circumvent the spirit of the new regs. Do you realize that your congressman is to blame for all this? Congress said get those undercapitalized clueless morons out the market ... Or we'll find a way to do it for you! That's where all this began. Good 'ole Uncle Sam (once again) protecting the average idiot from himself. Bucky Lee PS Their words not mine.
now now Bucky not everyone was born with a silver spoon in his mouth. How do undercaptilised learners learn...?? Come up with 25k and then start?? Thats a good recipe for disaster. Guess their tryng to breed a new investor instead of daytraders while all the big money firms daytrade their arse's off. you're right,Get rid of daytraders... step1)less than 25k their gone step2)those who borrow to get their 25k and fuk up their gone + their arse is billed. step3)??? new rule tomorrow. Unless you've got $50,000 in your bank account you can only buy petrol 3 times a year.. how'd ya feel about that Bucky I know you're not saying what they've done is right but imagine the outcry on the above which is effectively what they've just pulled off
You just don't get it yet... They are not targeting daytraders per se. They couldn't care less if we professional traders knock ourselves out trading a thousand times a day.... But they don't want Mr. John Q. Public "gambling" away his last ten bucks. They want Mr John Q. Public to go to professional money managers for professional help in INVESTING. They view daytrading for Mr Average Guy as a form of gambling that got swept in the backdoor with the tech revolution... And somehow by default became legalized for all.... So they said we can't have Mr. John Q. Public "gambling" his life savings away (unless of course it's state sanctioned lotteries)... And it was bye bye to daytrading for all but those with ample funds and professionals. They don't want YOU learning how to do this. Now do you get it? Bucky Lee
lol ok i see where your at now Guess they thought that disallowing people to swingtrade would be taking it a bit far huh.
I don't think it's daytrading that took a bite out of Mr. John Q's life savings, its was buyng and holding on to tech stocks, since he was no fool and followed his freind's advice. And in a meanwhile, he, was not eliminated. Bob
This single issue remains one of the most unresolved but critical issues relating to the whole 25k rule. I have been told by several DAT brokers and SEC gurus alike that it is the clear intent and requirement by the SEC to enforce T3 settling for all cash account trades, and that DAT brokers cannot extend "instant clearing" and availablity of buying power on an intraday basis for daytrades in cash accounts. It really is annoying to not have total resolution to this issue.
DATTrader, 1) T+3 settlement is not an impediment for daytrading in cash account. We can daytrade in a cash account AND settle T+3 the transactions. 2) "instant clearing" is not necessity for daytrading in cash accounts. According to the rules, we can daytrade in a cash account, while the clearing is delayed, even delayed with 3 days. 3) Realtime updating the buying power number is necesity for the brokers to prevent free-riding and not loose customers. Otherwise, if brokers stop realtime buying power updating(as you suggested), the cash accounts may buy securities for more than they can pay for with cash (and cash proceeds from prior trades) at settlement, and thus violate Regulation T at settlement. Therefore, SEC should enforce realtime buying number updating for cash accounts, because Realtime intraday buying power updating prevents cash accounts from violating Reg.T at settlement. The realtime buying power IS A CONSENSUS NUMBER, THAT IS UPDATED INTRADAY, WITH THE ONLY PURPOSE - TO PREVENT TRADERS FROM VIOLATING REG.T AT SETTLEMENT, THE ACTUAL CASH ACCOUNT BALLANCE REMAINS UNCHANGED DURING THE DAY BY ALL OF THE INTRADAY TRANSACTIONS, because all intraday transactions are settled 3 days later(T+3). Hence, none of the intraday transactions will affect the actual cash balance during the day, they'll afect the cash balance 3 days later - at settlement. "Daytrading in a cash account" term is misnomer, because you can't short or use margin in a cash account. To sum up, according to the rules, we can daytrade in a cash account with T+3 settlement and delayed clearing. Current regulations already resolve all cash account isses. Fohat
I got a very clean picture laid out to me today by a management person at Cyber who obviously knew and understood how they will handle cash accounts. For those who argue it's not fair or they don't have to do it that way or the regulations don't specify that etc. etc. I really don't care. As I've said before, all that matters is how the brokerage houses are going to implement their policies, not what they shoulda coulda woulda done. Your buying power in a Cyber cash account starts out each day fresh, taking the previous day's total and adding/subtracting gains/losses (minus commissions). You may use it up once and only once. For instance, you start with $30K, you buy $17K and soonafter sell it for $15K, you now have $13K left to use that day. You then buy $12K and soonafter sell it for $16K. You now have $1K left of buying power that day. Notice how your profits or losses didn't affect your buying power throughout the day. There are two kinds of cash accounts, IRA and non-IRA. If you go over your buying power in an IRA (which, BTW, will soon be prevented in their software but is not currently so) you will get a warning the next day, and after 3 warnings you account may be frozen. If you go over your buying power in a non-IRA you will receive a cash-call the next day requiring that you deposit the difference. For instance, you have $5K buying power left, you purchase $7K stocks, sell them for $8K. Doesn't matter that you made $1K, you went over your buying power by $2K and you will be required to come up with $2K.
And for some brokers add that because you sold it before 3 days(t+3) is up you just violated req t and run the probability of having your account frozen....Thats how mytrack is now running it. you buy don't sell before 3 days time....
Magna, I understand how Cybertrader and Mytrack handle cash accounts. They are all allowed to do it. Nobody can force them to provide 4:1 margin either, if they decide not to provide it. Datek allows daytrdaing in cash accounts imo, and gives 4:1 daytrading margin to all margin accounts. But what really matters is what the law says, not what some brokerages have temporarily have decided to do. Federal Reserve Regulation T (The law) will not chage, while brokers may change at any time their interpretation of the law and handling of cash accounts. Magna wrote: "...all that matters is how the brokerage houses are going to implement their policies" I don't agree with your satement and what it implies: that the law doesn't matter, but how some brokerages interpret the law and implement their policies only matters. The law is above all brokerage interpretations and policies. Brokerage interpretations and policies may change at any time, but the law will not chage because of their interpretations. Quite the opposite, all brokerage policies must adjust and obey the law. The law allows daytrading in cash account. Period. Although important, brokerage interpretations and policies may be changed at any time to allow daytrading in cash accounts under the law. The things that can change at any time (i.e. brokerage policies) doesn't really matter. What matters is the governing law, Federal reserve Reg.T., that has not changed for 30 years. If enough people demand it, a brokerage will probably provide daytrading in cash accounts. That's the reason to post on a message board. Everyone affected should demand that their brokerage provide daytrading in cash accounts according to the law. That's the positive constructive way to get daytrading in cash accounts. Fohat