shyhh, I can't answer the question with 100% certainty but I think the day trader label is a rolling target. i.e. if you do not trade for a few days you are no longer a day trader. I do not think you can get around the rules by opening a number of accounts as they most likely will be linked by the same tax id etc. nirva, you're off topic and I suggest if you want more info other than what I state below, either send me an e-mail or start a new thread. There really is no minimum to open an IB account. However, without proper margin you will not be allowed to trade. Currently the margin for S&P e-minis is: $4313 and NQ's: about $6700.
Regarding the "daytrading in a cash account" discussion, CyberTrader allows daytrading in an IRA account (which is, by definition, a cash account). And I also used to daytrade in a cash account (again, an IRA) at Brown & Co. Maybe this new SEC ruling will impose a $25K minimum even on cash accounts for daytrading? (not sure of the logic there as they're not marginable accounts, but our beloved overseers and protectors will never be accused of an excess of clear thinking).
shyhh, I believe that if you slip up and get slapped with the daytrader label, if you do not daytrade for 90 days you will no longer be considered a daytrader. As far as separate accounts, as long as each account was under a different name (I guess you'd need to have some trusted family members) you could daytrade the different accounts, so if you had two accounts you could do 6 daytrades in a 5 day period. It's not ideal, but I guess for those under the cap you've got to consider workarounds.
What the hell is this? Just discovered a page at http://www.protrader.com/nl/07022001c.html which tells me that the new margin rules will apply from august 27 instead of the official announcement of the end of sept 2001.. is this correct? I can find no official reference to this sudden change of previously stated date. Would be grateful to hear the truth.. have been following this thread and am amazed..
Thanks for all the helpful posts. This business is tough enough without having these bullies nudge us out of their reindeer games. You'd think that they'd be happy to take our money while we are learning. By the way, has anyone considered getting this story to the news media? I know it's a bit off the wall, but someone like Bill O'Reilly or even Rush Limbaugh would eat this story up. (Especially with the whole government in loco parentis angle). You might laugh but O'Reilly sure gave the Rev.Jackson a run for his money. When it comes to the economy, I don't always agree with these guys, but one thing's for certain. They know how to rally the troops. This could be the support we need to keep these rules from getting out of hand. 25K really isn't that bad, but like other's have stated in this thread already, what's to stop them from raising it to 100k or 500k? We might all have to become stock brokers, lol!
matt: RE: daytrading from a cash account. I use IB as my broker -- they state that daytrading from a cash account is a violation of federal reserve policy. Whatever that means. Bottom line for IB is; unless you meet the account requirements of the new ruling -- you will not be allowed to "day trade" by the definition of the new rule. At IB they are still working out how they will monitor and administer in order to comply. Ask your broker directly your question, and let us know what you find out. regards/greg
Tailspin has been daytrading a cash account at IB for over three months now.... check it out>>> http://www.elitetrader.com/vb/showthread.php?threadid=1051&pagenumber=8
How about this? Everyone who cares about this issue e-mail their reps as well as their brokers and threaten to close all positions and accounts on the effective date of this new law? If they are concerned about the downward spiral in equities imagine what would happen if all accounts smaller than $25,000.00 were closed on the same day.