i'm getting different info...my broker just told me that with my cash account,i would be able to make more than 1 trade a day
A couple of points... You can place more than one trade per day in a cash account but you cannot use up all of your money, buyng and then selling it and use it again. What your broker allows you is what really matters. Since that is the reality of the situation. Let me tell you this though. There are many margin departments at many brokerages have differing opinions. Each of those margin managers have interpret the SEC, NASD, NYSE rules and apply those rules to the programming. The programmers then tell the margin department what is possible and what is not. Sometimes this means compromising the rules. Even more of a point... when you say you "talked to your broker." I urge you to be careful. Most of the customer service reps do not specialize in margin or anything else for that matter. They are general problem solvers. The real specialty of a customer service rep is getting you off the phone. Ask to speak to the head of the margin department, when you have a margin question. Do not accept even the manager of the customer serice reps. He is a truly sweettalker, who will throw big words around to get you off the phone. Ask very specific questions and get the names of the people you talk to.
When i just talked to my broker(probably wrong),he said that in my cash account i can place an unlimited number of trades a day.So if i have 50k in the account,he said i could buy 50k worth of stock,sell it the same day,and make another 100 trades that same day if i wanted to. So my question is if this is acceptable;are there any legal consequences;does this rule just vary from firm to firm,and if the firm says it's ok,then it's ok?
Many firms mishandle accounts, sometimes on pupose and sometimes on accident. The risk is on the brokers side. They are the ones who will get reprimanded by the regulatory organizations, if they get caught. There is no risk to you. I should note that I am not an attorney or anything. Many firms consider it a battle to cheat the system. Like sneaking in short sales on ISLD and allowing margin lenancy. They hope the regulators will not find out, and sell some poor manager down the river when they do. Many of solo persons have taken the rap for the whole brokerage houses planned abuse. However, I have seen many clients told one thing and then when they try to do it, it does not work. Sometimes the people at the brokerage are learning with you. Never assume they have all the answers. In this regard REALITY IS KING. If you can do it - then do it and do not raise the issue. But, be careful you may find out they were wrong and now you are the one who cannot trade your account. Keep in mind that it is ludicrous for me to say people error, but that I am 100% right. I learn all the time. Which means that I was wrong previous to what I learned.
qazmax,it sounds like you are right and i would agree with you.one more question...say i have a margin account with 25k cash in it,so i get 4 to 1 leverage only for daytrades(otherwise 2 to 1 for overnight positions);now i buy 100,000 worth of stock(using my whole 4 to 1 margin)and sell it the same day;now is it true that i must wait 3 days to place another trade?i'm guessing i would since i used up all the money that was available.
Here's some info I've gotten from the 3 DA brokers I can find for Canada - does anyone know of any others? .......... IB In a cash account at IB you will have to wait three business days to use the funds form a stock sale. In a margin account you can use the funds immediately. If an account has less that $25,000 USD you can only do 3 day trades in a 5 day period. If you have over $25,000 you can do unlimited day trades. Day trading rules only apply to equities not options or futures. ......... Trade Freedom (my questions and their answers are the same coloUr - no coloUr coding here I'm curently trading at home in Ontario with another direct access provider, I have a couple of questions about your firm's interpetation of the Day Trading and Free Riding rules. 1. If I have $10,000 USD in my account and daytrade a $10,000 position how long after I close the position will I be able to make my next trade? (assuming that trade was my first in a 5 day period). After you close your position, you can re-enter into a new position right away. 2. I understand that day trading rules currently do not apply to options or single stock futures, but do the free riding rules apply? Exactly what are those rules? I am not familiar with these rules, can you be more speciifc? NASDAQ & NYSE introduced the new day trading rules to the SEC, it is up to the SEC to apply the proposed rules through the US registered brokers for so called "non-institutional customer". As a registered Canadian broker, we must abide by IDA and provincial securities regulations, and not the SEC. Please note that you are considered a client and not a trader when opening an account with TradeFreedom Securities Inc. Thus if you open an accout with TradeFreedom: - nor will you be subject to SEC day trading pattern rules; - nor will you be subject to the minimum $25 000 USD funding requirement. Our opening account balance minimum is CAD$ 10,000. 3. If I open multiple accounts can I trade stocks up to 3 times in each account in a 5 day period if my account balance is less than $25,000 USD? Yes, that is possible. Other Questions: 1. Do you have a discussion board? Unfortunately we do not. 2. If I transfer my self directed RRSP to your firm can I hold the funds in CAD and trade up to 30% of it in the US markets to avoid CCRA tax penalties? Do you have a ... "watchdog" function in your software to help RRSP clients avoid going over the 30% limit? Yes it is possible to hold up to an over the 30% threshold. As a self directed account, the account holder is responsible to keep track of all record's within there own account. We do not have any function in our software which will track this. You can always call our customer service department if you will be needing the exact % helid in USD. -------- Swift Trade (with regards to TF's email) That is correct if you were to open an account in the USA. However, SwiftTrade is governed by Canadian rules and by the IDA. In Canada, the account must be opened with a minimum of USD $10,000 and all accounts must maintain a minimun of $5000 in order tol trade.
If youhav a 4-1 margin you can trade your brians out, in and out. So if you have $25,000 you can buy and sell 100,00 all you want. But if the equity falls below $25,000 you will get an "equity call" not a "margin call". If you have a cash account... then you can only spend the amount of cash in your account that day. Then you have to wait 3 days for the stock to settle, before using those funds. Hope that helps....