Daytrader at Etrade

Discussion in 'Retail Brokers' started by irniger, Feb 1, 2007.

  1. irniger


    I was "elected" daytrader at Etrade today, although I have been trading stocks in and out the same day (my understanding of a daytrader) and mostly swingtrading, holding stocks for 2 to 10 or more days long and short.

    But strangely since today, I cannot trade anymore, although I have >100k $ free for investments in my account. In a lengthy phone call I received no answer to this illogical situation and I was told, this is along SEC or some other rule.

    I have been swingtrading and daytrading for years beside Etrade with many other brokers like Ameritrade, Schwab, IB, TS and many others. This never happened to me before.

    Can anyone enlighten me?

    Thanks, Felix
  2. Palomino


    You mean a pattern day trader?

    I think they've made a mistake. Have them explain to you what exactly you've violated.
  3. GTC


    irniger, ask Etrade if you have violated in PDT rules, day trading calls, Reg-T, etc. Then, seriously think of moving your money to a better broker soon. For example, IB does automated margin liquidation if needed so that you do not have these type of calls and get stuck. This automated margin liquidation might be helpful some people. First, find exactly why Etrade is not letting you trade.
  4. irniger


    Yes, I became a pattern day trader. Looking up the rules and regulations on the etrade website I don't find a reason to not let me use my funds of more than >100k $ to trade. I have no margin call, with all that money in the account and presently I only hold one long and three short positions which at present I don't want to liquidate.

    Can anyone point me to a rule why I cannot use my funds to trade? I didn't get a logical answer on the phone with etrade and they haven't reacted to my 2 emails I sent them.

    Thanks, Felix
  5. irniger


    Also I don't like their sending me important messages via the alert. I never look at the alerts, because there is every single trade listed, for instance each of 10 trades of 100 stocks when trading 1'000. This pattern day trader alert was buried somewhere far down.

    A few months ago I was stopped trading, because the W8BEN form (I am foreigner) was not up to date. Instead of letting me know per email, an appropriate message was burried in the alerts 3 weeks earlier and about a thousand trading alerts back. It took 8 days until the account was free again for trading until the original W8BEN form reached them (a fax was not accepted). I lost quite some money because I could not liquidate some stocks. The IRS would have taken 28% of the proceeds (not the profits) from these stock liquidations. They refused to send these messages by any other means than alerts.

    Very very bad customer service.

  6. ronblack


    Are your short positions losing money? If that is the case and the combined open loss when subtracted from your available balance leaves less than $25000 in your account then you will not be allowed to day trade, I think.

  7. Is your net account value, minus the value of any option positions, less than $25K? In that case, if you're a pattern day trader, you can't open any new positions until that amount gets above $25K or 90 days has elapsed.
  8. irniger


    I was up on all positions, no losses - and my net cash available was way over 100'000 $. So I still don't see why I wasn't allowed to use my money to trade.

    In the meantime, Friday, my funds were available again but I have still not received any explanation for the blockade of my funds.

    Thanks for the comments, Felix
  9. GTC


    irniger, if you were flagged as PDT and your account were <$25k, you still would have been able to close out your positions--longs and shorts. Even if you are allowed to trade again next week, thoroughly find out from Etrade why you were not allowed to place a trade. Then, consider moving your account to some other broker with a better customer response.