IB's implementation of the "Day Trader" rules is as follows: A customer will be deemed a "Pattern Day Trader" when they make more than 3 day trades (open and close a position on the same day) within 5 business days. As of September 28, 2001, "Pattern Day Traders" with greater than $25,000 in equity will only be subject to a 25% margin requirement during normal market hours. On each day at 3:55 ET the regular maintenance margin requirement of 30% will go into effect until normal market hours resume the next business day, at which time it will again drop to 25%. These customers will continue to be defined as "Pattern Day Traders" for a year after they are last put into this category. "Pattern Day Traders" with less than $25,000 in equity will not be able to open any new positions at any time subsequent to having bought and sold the same stock on the same day three times with the last five business days. These customers will continue to be defined as "Pattern Day Traders" until less than 3 day trades are made within the last 5 business days. Cash accounts will not be able to use sales proceeds for new purchases until the third business day following the sale. ----------------- They go on to say that trading through a cash account (based on immediate settlement) will not be allowed: We have spoken directly with NYSE and NASD personnel in an attempt to clarify the facts, and have been advised that the NYSE will issue written clarification in the near future. The following represents a summary of the advice we have received: NYSE Interpretation 220.8 (c)/13 states that "Day Trading and Free Riding in a Cash Account are not permitted under Regulation T". Customers with less than the $25,000 "Pattern Day Trader" minimum equity requirement may not trade on an unlimited cash basis in a margin account by receiving credit that day for the proceeds from the sale of stock ('instantaneous credit"), but, rather, must wait for the settlement date to receive credit for the proceeds from the sale of stock. The date of implementation of the "Pattern Day Trading" rules depends upon which regulatory organization the firm is a member of. Since IB is a member of the NYSE, it was required to comply with the NYSE's August 28, 2001 implementation date. Firms, which are a member of the NASD, and not the NYSE, must comply with the NASD's September 28, 2001 implementation date. Day Trading rules apply to all US Exchanges and ECNs.