floating a trial balloon concerning pdtr regulation

Discussion in 'Trading' started by marketsurfer, Jan 2, 2003.

  1. BCE

    BCE

    Quote from Phantom Trader:
    "I think Nitro feels that these issues aren't relevant to the group that the Elite Trader Forum is intended to serve. To the extent that they don't affect the "professional trader", he may be right.
    To the extent that they may affect even some professional traders, these issues do become relevant to Elite Trader's target audience.
    ______________
    Emergency exits, doctors' entrances, strict nurses on duty, keep costs down, stays both long and short - BUT ABOVE ALL, YOU GOTTA HAVE INSURANCE"

    ________________________
    I agree and that's what I was trying to get at too along with my points that they affect other nonprofessionals too. And they shouldn't. Plus the $25,000 figure seems so arbitrary. How would some of the PDT rule proponents at ET feel if this figure was changed to $250,000-$500,000? What if they decided you needed $250,000-$500,000 in your account to effectively trade professionally? Would those of you supporting this rule then feel differently if it effected YOU? Think about it.
    Also the 3 day trades a week part of the rule is totally ridiculous and arbitrary.

    PS. Didn't see your post gaj before I wrote this. We're obviously on the same page.
     
    #21     Jan 4, 2003
  2. BCE

    BCE

    Quote from Phantom Trader:
    "It would become a game of Musical Chairs. Those with less than $250,000 would start to sense the unfairness, those with more than $250,000 would continue with smug attitudes of condescension toward anyone complaining. The smaller and smaller group remaining seated would claim "caveat emptor".
    _________________
    We shall not cease from oil exploration
    And the end of all our exploring
    Will be to arrive where we started
    And pollute the place for the first time
    - G.W. Idiot - "

    _________________________________________

    Good points. That's it exactly. :D
     
    #22     Jan 4, 2003
  3. gaj

    gaj

    phantom - exactly...
     
    #23     Jan 4, 2003
  4. nitro

    nitro

    I agree with much of what you are saying, I just don't see how it affects what I belive are those that aspire to make trading their life. My initial response was:

    BTW, to me, there is no difference between "... the PDT rule not how much capital one needs to realistically earn a living from trading."

    nitro
     
    #24     Jan 4, 2003
  5. nitro

    nitro

    50K or 100K would not affect me, and in fact I think they may be good numbers to trade (your own money) with to have any kind of chance. Acess to 200K would affect me. In that case, I would think that this profession may be over for me. I would then either:

    1) Join a firm that did not require 200k outlay
    2) Go and get another job (and possibly save up to get back in the profession as I work at it now)
    3) Trade SSF's or the ES or NQ (assuming they did not also get the PDT rule, otherwise, go to step 1 or 2)

    nitro
     
    #25     Jan 4, 2003
  6. i started trading with 2000.00. it was not enough to buy 100 shares of stock, so i traded small. i also traded options, i could purchase 10 options and control 1000 shares of MSFT or whatever. one can start with a tiny bit of money and develop as a trader.

    best,

    surf:)
     
    #26     Jan 4, 2003
  7. And while you were joining a firm, getting another job trying to save up $200,000, and trading futures, you might notice a message on a trading forum from someone else who had been affected by these rules, suggesting that the rule might be amended so you could return to the trading you are enjoying doing now.
    And if someone else on that forum replied that less than $200,000 is not enough to make a living, and therefore the PDT does not affect any truly "professional trader", you might reply that you were doing alright making a living for yourself with less than $200,000, before this PDT rule came along to define for you what does or doesn't constitute "making a living".

    You might state to that person that as you had previously been a professional trader according to your own standards, that in causing you to join a prop firm, get another job, or move to futures trading, the PDT rule had indeed affected a "professional trader".
     
    #27     Jan 4, 2003

  8. for a guy that's "gotta do size" you don't have any money:eek:
     
    #28     Jan 4, 2003
  9. nitro

    nitro

    :confused:

    100K * 4 = $400K of stock.

    FWIW, most of the stocks that I trade(d) are/were in the $20 to $75 range, all on the NYSE, all on the SP500. C, which is a favorite of mine, closed at $36.11 on Friday. So, hmmmm, I can trade approximately 3,000 shares of Citi ON CASH, and 4 times that or approximately TWELVE THOUSAND SHARES on margin.

    The "sweet spot" for most professional equity traders is 2000 shares.

    nitro :confused: :confused:
     
    #29     Jan 5, 2003
  10. nitro

    nitro

    Huh?

    I would reply that I was making 100K a year, which was 100% return on my equity, which happened to be enough for me to stay in the game as a professional without having other jobs before the "PDT" rule. The poster would probably tell me that if he were in my shoes, he would go the alternative routes where undercapitilization was not an issue.

    However, if the year was 2150, and inflation had made so that 100K a year was the equivalent of 25K now, and I turned my "100K" into "200K" without ever going below "100k," I would agree with the poster that I might as well be flipping hamburgers for "100K a year" at McBurgerKing (they had since merged.)

    Note that the key element is not that I was able to make money trading (stated as doing "fine" by you above, whatever that means,) but that MY ACCOUNT SIZE ALLOWED ME TO LIVE SOLELY BY TRADING, AND COULD STAND A BAD STREAK THAT INEVITABLY COMES TO ALL TRADERS.

    nitro
     
    #30     Jan 5, 2003