A trader friend of mine has been looking for a way around the NASD day trading rule, which states that you must have an account over $25,000 in order to day trade everyday (I don't worry about it myself because I have much more than that). Anyway, he found this firm that is not located in the US, so they are not governed by the NASD and therefore do not have to follow this rule. Here is their website: http://www.alldaytraders.com He has been using them for several months and says he looked into it before he started. Including speaking to a friend of ours thats a securities attorney. You still get a direct access trading platform with Level 2 quotes and charts. The firm's bank is in the US and the clearing firm is in the US, so the funds supposedly never really leave the US. He says he has deposited and removed funds several times with no problems. He also day trades everyday even though his account is only worth around $12,000. Obviously this is not for everyone, some people may not feel comfortable trading with a foreign brokerage which is understandable and a matter for you to decide on your own. It is something I found interesting when he told me about it and I figured alot of you without the $25k may be interested as well, so I figured I'd share the info. If this is valid, it seems like such a simple answer to this issue that I can't believe it had not been thought of earlier (Don't like US rules = Don't trade with a US firm). If you have any questions, post them and I'll try to ask him or even better you could go to the site and ask for yourself. After all I'm not your secretary.(Just kidding I'll ask him if you want).
Cool idea... I'm a noob trying to build up my account but am stymied by the 25K scam/rule. Questions: 1) is it legal (for US citizens)? 2) how long have they been in business? Very appealing, but like you said, what's the catch? Anybody else out there in ET land use them? Thanks, TD
They have apparently been in business for several years. However they just worked this deal a few months ago with the US firm my friend and I both used ( I still use) that allowed them to break into the day trading market. (This is sort of amusing because my buddy is actually here with me and he keeps telling me to stop writing these preface word like "apparently" and "if this is valid" etc...) As far as legality you can open an account with a foreign firm, it is not illegal. Plenty of foreigners have accounts with US brokers. He's telling me his accountant said it may even be more beneficial to have a foreign account due to some issues with writing things off. Ok, now he's pissing me off talking in my ear non stop about this... I may have to kick his a$$.
Not sure if these folks are legitamate. A few more websites for the investigation: http://aimdaytrader.com/ http://www.allianceinvestment.com/ http://www.jamaica-gleaner.com/gleaner/20040502/business/business4.html http://www.jamaica-gleaner.com/gleaner/20010704/business/business1.html smitty
Sorry about those posts I was 2 sheets to the wind when I wrote them. My buddy has been using the service through the website www.alldaytraders.com and he says it is legit. Like I said it's not for everybody, but day trading under $25k seems like something many people might be intersted in. You guys can make a determination for yourselves.
"AIM is not targeted to U.S. persons." Thats just where I wanna put my money in JAH MAY CAH mon! Read the fine print on their website. Alliance Investment Management has some sort of affiliation with Best Day Trader dot com. They have a link on their site. Buyer Beware!
FYI, I emailed them about the 'legality' issue and this was their response: "We do not target US accounts, because we are not registered with the SEC of the US. However we are registered with the SEC of Jamaica. I do not see any reason why you couldn't open an account with Alliance. Because we are not a member of the NASD the rules of the NASD do not apply to us. We do not have PDT rules here. The SEC of the US does allow US people to open accounts out side of the US, otherwise it wouldn't be a free country. Alliance is not required to register because we do not target US people to be our clients." Buyer definitely beware, but I just may take the plunge... Ya mon rastafari! --TD
This is the way I look at it (and believe me my friend and I talked at length on the subject). Maybe you start with a small amount like my buddy did. He deposited only like $3k at first. He's been there a few months and recently he depositied another $9k+. Obviously this is a new idea, but if you can day trade without the NASD rule, which to me is total BS anyway, why not. I honestly don't think it's a scam. I mean think about it, they probably stand to make a butt-load of commission from this idea. They shouldn't need to run away with your money.
One point to consider is ! (even for non US traders) Is your brokerage SIPC insured just like the bank accounts are insured by FDIC ? http://www.fool.com/foolu/askfoolu/2002/askfoolu020111.htm
The commission rates are way too high with your suggested broker, All Day Traders. Your cost with IB for buying 100 shares of XYZ is $1 commission. With this firm it is over 8 times as much. $7 minimum, + "$1 Software fee" + ECN + + . With deepest respect, you'll lose your ass. Caveat Emptor.