hi, Got my account into PDT in MBtrading, cannot short sell. Must wait 90 days before I can reset my account. Does IB has such ruling? Heard there's a PDT reset, is the reset subject to 90 days? Any other broker offer reset without waiting for 90 days?
whether or not you can short sell has nothing to do with PDT rules. it has to do with margin rules iirc, you have to have a margin account to short sell. but whether or not you are defined as a PDT should have nothing to do with whether you are able to short sell or not. if you can go long, you can go short, in ANY margin account of course, you should just trade futures, then all those silly SEC PDT rules are irrelevant
Innovest ... Before i got all my funds transfered into IB i got put in time out twice during a three wk period-4 days each time. I couldnt trade at all during those two periods. ... rcj
But once i exceed 3 daytrades within 5 days, my margin account is changed into cash account, then i cannot short sell anymore. i Have asked MBT, they said because of the PDT rules, they have to wait for 90 days to change mine back to margin account. Is this normal in other broker, like IB?
That's the substance of the PDT rule. It's a regulation not MBT's internal rule so you will run into the same problem with any broker. You need to have at least $25K to avoid the lock up!
what MTE said. I vaguely recall reading somewhere that if you go into PDT the first time, there is the possiblility of a one-time get-out-of-jail reset to get you back into margin status. But with the second "offense", I would think you are on shaky ground; but it never hurts to try some pleading with your broker. The current trading environment, in my opinion, argues for more daytrading than swing trading and the ability to short, as needed, so I can imagine these limitations would be very frustrating. I never bought into the "logic" of the 25K miinimum rule, but until there is an uproar about it to bring about a change, you can't fight city hall, or the SEC. Out of curiosity, what happens to your buying power when this happens?
When you violate NASD RULE 2520, your account is restricted for 90 days to CLOSING transactions only. Your buying power is zero, as your account is frozen. I never heard of a "Reset" button, are you making this up? Either put 25K in the account or trade futures my little piker friend.
if it's a one off, and if u didnt do u it on purpose u can ask for your acct suspension to be lifted [i think the reset thing is correct]...as i said if it's the first time u violated pdt rules they are gonna let u get away with it. tell them tho and presto.