The continuing criticism of the SEC misses the point. Read DG2000's post and the associated documentation carefully. It was not the SEC's idea to introduce this rule. The impetus came from the NYSE and NASD, which are to a large extent self-regulating. The SEC essentially ruber-stamped their request for rule-making. If the powers that be in the securities industry do not want day-trading accounts with less than $25k in them, who are the SEC to tell them that they must allow such accounts? The SEC's role in overseeing these self-regulating organizations is to ensure that they are not structuring the rules to allow the industry to rip-off the investors. In no way can this rule be seen as trying to do this. Therefore, the SEC would be hard put to disallow it. Rightly of wrongly, the NYSE and NASD see the proliferation of day-trading in small accounts as posing a risk to their members that they do not want to accept. Read their documentation. That is the reason they give for asking for the rule-making. Therefore, if you want the rule overturned, you have to convince the securities industry that they are wrong and that it is in their best interest to have it scrapped. It is not much different from the insurance industry deciding there are certain types of risk that they don't want to accept and declining to insure it. The chances of the industry asking for the rule to be overturned just after it goes into effect as a result of their request are somewhere between zero and none. So deal with it, get on with your life and stop asking government to intervene in every aspect of society that is not to the liking of your particular special interest group. If governments were less prone to respond to the bawling and handwringing of every group that comes down the pike, the world would be a much better place.
Funny that ...i thought the only person i was putting at risk daytrading a cash account was myself. I now don't have the right to do that,but your saying i should just say yeah ok and move on???? Cash accounts now need to be margin accounts with 25k in them if you wish to daytrade. Sorry but i don't need anyone protecting me from myself,I'd just like my cash account rights back...the rights that have just been taken away on a rule sold as being a MARGIN RULE Note for those affected the 5 days is business days too ..So remember weekends don't count. Judging by what i saw on my brokers help screen this morning theres alot of people only just woken up to whats going on.
i believe dufferdon is right in that the exchanges proposed the new rule (then the SEC enacted it). however, i agree with tuna that it is a bad rule. let those who will lose money make their own mistakes...and in the meantime, don't ruin opportunities for everyone else.
nyse: http://domino.nyse.com/contactus.nsf/EnWebContact?OpenForm nasdaq: http://www.nasd.com/feedback.html
There is a saying that goes: may the Lord give me the strength to fight for those things that I can change, the tolerance to accept those things I cannot change and the wisdom to distinguish between the two. If you guys want to waste your energy fighting one of those things you cannot change, go to it. You arrived on the battlefield at least 12 months too late and the fight ( which was not much of one, because those most affected were not paying attention) is over.
dufferdon, It's not over. The rule can be changed. Rules change. Just yesterday Nasdaq changed its longtime rules and allowed sub $1 stocks to continue to be listed on Nasdaq, instead of delisting them. The same way Market forces will put pressure the uptick rule to be changed (MMs already can short on a downtick) with the introduction of Single stock futures and other competitive markets. The traders will simply vote with their money and go do business elsewhere. I don't see why many of the affected by the new margin rules < 25k daytraders will not switch to daytrading Dow, Nasdaq or S&P futures, for example. 1 Dow emini futures contract = 200 DIA shares 1 S&P emini = 500 SPY shares 1 Nasdaq emini = 800 QQQ For example, a $4411 futures acount trading 1 Dow emini futures, will be as if a stock daytrader trades 200 DIA shares in a $4411 account with 4:1 margin. Actually even a $2k account can daytrade Dow emini futures , because the price you have to "pay" to trade it, is $1080 per contract (initial margin). With those qualities, I expect this contract to attract alot of liquidity (It starts trading Sept.30). Similar things could be said for Nasdaq and S&P futures. If enough people and capital move from NYSE and Nasdaq to daytrading (emini index, single stock) futures or options. And why not? Dow emini futures offers over 16:1 leverage. NYSE and Nasdaq will be forced to change their rules (margin and uptick) to attract them back. Fohat
So go and trade the futures. That's the smart thing to do, switch rather than fight a losing battle. Isn't that what I just told you with the quotation? You don't have much choice anyway, do you, as the rule is not going to change any time soon. As I said previously, get on with your life rather than bemoaning the past and wasting your time and effort launching your complaints on deaf ears. You seem to have got the message. Good luck with the futures. BTW I read somewhere that the single stock futures may also be subject to the $25k rule, but I can't remember where. Perhaps you should research the rules for them so you won't be caught by surprise again.
I'd like to know what happens if they get away with it?! Any reason why they wouldn't touch futures and options market, and what then? Lets set wheels in motion, economy is terrible, short sellers "killed it" why not ban short selling! And why not, people take it and move on. If you don't punish terrorism, why wouldn't they blow up few more buildings, after all, no one complains! Kill the monster while its small! Bob
Nasdaq, NYSE and SEC can't "touch" commodities futures and options tradining because they do not have jurisdiction there. Commodity futures and option markets are regulated by CFTC, an independent agency created by Congress, not SEC. But SSF (Single Stock Futures) are different story, because the underlying instrument - stocks are under SEC jurisdiction. Thus, SEC and CFTC would jointly oversee single-stock futures, which could be listed on both stock and futures exchanges. Fohat
Fohat...this is part of an email from Datek The new regulation regarding Pattern Day Trading begins September 28th. The rule stipulates that if you make 4 Day Trades in a rolling 5 business days you are a Pattern Day Trader. A day trade is when you both open a new position and close it during the same trading day. (This includes options.) A day trading call is created if a day trade exceeds day trading buying power. A Pattern Day Trader is tagged for 90 days from the last Excessive Day Trade made. If you are tagged as a pattern Day Trader and your account is below $25,000.00 your account will immediately become Restricted. Your account will be reviewed for the past 90 days on September 28th to determine if you were a pattern Day Trader.