"Regulatory requirements dictate that we modify our US day trading policies. Over the next week we will be implementing the following additional day trading margin restriction when opening new stock positions: Prior night's Equity with Margin Value >= Account's Total Initial Margin Requirement Any opening stock transaction not meeting the above criteria will be rejected. This day trading margin restriction only applies to "Patterned Day Traders" and will in no way effect maintenance margin requirements or any initial margin requirement for options and/or futures trades." Can someone explain what this means to me in plain english? If I have an account of $20,000 and I am a PDT, what does this mean to me? Thanks!
I notice IB likes to cut and paste programming 'like' code as a form of explanation. Better to use plain english. And as the Queen might say, WTF is this all about ?????????
I got the same email from IB. Something happened to me today at one of my other accounts (TradeStation) that smells related. I got a small day trading call because of a supposed brand new enforcement of a rule by the clearing firm (Bear Sterns). The way it was explained to me, it only affects people who hold positions overnight. Specifically, I held a piece of QQQ overnight on 9/10, a smaller position than I would normally trade, and when nothing bad happenned overnight, I added to it in the morning...later I closed out all of it, and then daytraded the QQQ 5 more times. I never never busted my buying power (according to the rules that TS was using), and was all cash at the end of day. Even so, Bear Sterns says that I exceeded my daytrading buying power...I was further advised that had I closed out my overnight position before daytrading I would not have run afoul of the rule. For what it's worth, TradeStation told me that they disagree with Bear Sterns...that when I closed everything, I in effect closed out my overnight first (by FIFO) then closed out the add. They (TS) told me that they would let me know the result of the dispute, which is affecting many of their clients. They also told me that Bear Sterns just started doing this on 9/11 (trading calls went out 9/12). I wonder if this has anything to do with IB's notification. I wonder if the Feds just started clamping down on something that is now going to ripple through to all brokers. Bummer... --Derek
These fucking SEC rules are getting way out of hand. They need to stop regulating so much and start focusing on other things like corporate fraud, accounting errors, etc.
I got the same e-mail and still don't have a clue what it means . Def or anybody else, can you explain what this means? Thanks in advance/