So that means SSF are subject to PDT trading rules. That totally defeats the purpose of SSF for me. Is this an industry wide mandate or just IB making new rules? If anyone knows of a broker not applying PDT to SSF please post it here, I need a new broker.
Some details surrounding you single stock futures trades would be nice. SEC rules state that they are exempt. So, did you also trade stocks? Or did you get a margin call?
No margin call , only other trades were options that were held overnight or multiple days. The only trades that were opened/ closed the same day were SSF. I have a universal account with IB. Just seems very strange for them to unilaterally adopt this rule without any regulatory change in status.. here is IB email Dear Trader, Yes, single stock futures now count toward the PDT designation. If you have any further questions, please feel free to contact us again. Regards,
Strange. I can't find any SEC text that states this as a new addition to rule 2520. Though I can see the logic since the underlying is a stock. I think the rule stinks in any case. Ask them for the text on the NASD/SEC rule change that now includes SSF.
I replied back that I would like to see the regulation change since I was not aware of one. Though they invited further questions, I never got a reply. I have sent an inquiry to One Chicago. There is no news of this anywhere so maybe IB just made up their own rule. Can they just do this on their own? or why would they?
There are two separate issues here. The first is whether trading activity in SSFs can get you designated as a PDT. The rule states that "In the event that the organization at which a customer seeks to open an account or to resume day trading knows or has a reasonable basis to believe that the customer will engage in pattern day trading, then the special requirements ... of this Rule will apply". So in theory, they could designate you as a PDT as soon as you open an account, without your having made any trades. The second issue is whether, once you've been flagged as an underfunded PDT, you're prohibited from opening SSF positions. Was that the case with you?
Unfortunately, SSF never had the tax treatment that other futures enjoy. The 60/40 mark 2 market capital gains does not apply.
I usually hold overnight but earlier this week did a couple of trades on same day. When I was putting in a trade yesterday I got the warning but as long as I hold overnight for the next 4 days I am back to +5. So I was warned on PDT but have to do one more intraday to officially become one.
It has to do with them changing from trading the SSFs in the commodity sub-account to the equity sub-account, the benefit of which is to allow lower margin rates for carrying some types of positions. See the June 9th email. I also think it gets you SIPC protection now, though I don't see that mentioned in the email.
Margins on ssf are very low anyway so how much is there to gain. I remember that email. But it defeats the purpose of ssf and the fact that they have unilaterally done this makes it more annoying. Other than their very fast reply to my initial inquiry they have yet to respond to any of my requests for more info .