yes, SSF's need to be traded from a securities or commodities account. IB does it from the commodity side. The benefits are better leverage and no PDT rule. The negative is that a SSF in a commodities account can not be used to offset the physical stock.
I cannot talk for European, but for Canadian it is possible to do daytrading on NYSE or NASDAQ with as few about 5000U$. Some direct access offer penny fee, some other by ticket. If they are 100% Canadian, they don't have to apply PDT, but if they have a US Branch as IB, Ameritrade or CyberTrader, the PDT will be apply. Terra Nova have done a workaround with a Canadian firm for which they don't apply PDT. Some others are 100% native and don't apply PDT as TradeFreedom or Disnat Direct. For Golden Market Management at Montreal I don't know. As you can see, the US brokers have some problems with the PDT even in Canada, they cannot do a fair competition against some brokers because the regulation follow them outside the country.
At IB if your account falls below 25K you are limited to 3 day trades per 5 day cycle. This rule is hard coded into their system. The moment your equity falls below 25K the system will look back over the last 5 days and calculate the number of day trades you have made. If that number is greater than 3 your account will be restricted from anything but closing transactions for 5 days or until your account balance returns to a level above 25K. Note that once the 5 business days have passed you will be allowed to trade once again but you will be limited to 3 day trades per 5 day period. An example might clarify the rule: If on Tuesday you made 1 day trade and then on Wedneday 2 day trades... then Thursday your account falls below 25K, at this point you will be restricted from trading until Tuesday of NEXT week at which point you will be able to trade but your account will allow only 1 day trade. If you don't use that day trade, the next day being Wednesday your account will show 3 day trades remaining. Of course you can make as many non day trades as you like once the system is able to look back over the last 5 days and count fewer than 3 day trades. Hope this helps.....
The response I received from IB (at the begining of this thread) said that because I've been daytrading I am now a Pattern Daytrader, and as such, once the account falls below 25K it will be frozen for 90 days until I deposit more money.... I don't think the 3 trades in 5 days applies once you've been tagged with the "I'm a PDT" designation......
Look it's pretty simple once your account falls below 25K it is frozen for 90 days after which you will no longer be a PDT'er and will be permitted only 3 day trades in a 5 day period (system automatically locks out any further trades to prevent this designation) Steve explained this very well on page 1
and open a new account with a different brokerage and then just swing trade that money until you've built up the 25k again (or 30k for a cushion)? Is this not possible? That way your money is no longer locked up in the same brokerage that is restricting you for 90 days and you are allowed to start over without the PDT designation at a new firm. Yes, I do realize that you would not be able to day trade since you are obviously under the 25k rule. Or, is the rule that you would be able to swing trade at IB as is since you are under 25k even though you are PDT for 90 days and access 2x margin instead of 4x margin? What did I just write? Now I'm confused...LOL
I'll never post again after 11pm local time. I don't even know what my post means now. One question, if you were designated PDT at IB and fell under 25k in the account would you be able to swing trade that account at 2x margin. Or are you completely locked out of the account until 25k is reached again since you are PDT? Ok...that's better I think.
Has this policy changed recently? Can I really not withdraw $20K from a $30K, previously day-traded account and just use it for backup hedges and small longer-term swing-trades? I thought that if a PDT account fell below $25K, you'd revert to non-PDT margin rules, where you could do 3 day-trades in 5 days, with 50% initial requirement. If the 90-day policy _is_ correct, could you open (or already have open) a second account in which you never day-trade (and is therefore not flagged as PDT), and simply transfer the money from the "frozen" PDT account to the non-PDT account? If so, what's the purpose in freezing the PDT account for 90-days instead of just making it act like a non-PDT account. I thought the 90-day freeze was only to be applied for not meeting a margin call, which can't (well, almost) happen at IB.
My account at IB fell below 25K on a number of occassions and was never restricted for 90 days. I tried to explain exactly how it works in my last post on this thread, so go and read that if any of you are still unclear about the rule as it applies to IB accounts. One point I should make is that I haven't placed a trade with IB for 6 weeks and closed my account 2 weeks ago and am now at ECHO. So if the rule has changed in the last month or so I wouldn't know. But I can promise you that my last post is accurate as far as the rule worked while I had my account at IB and the 90 restriction that people keep going on about never applied.