Pattern Day Trader Rule... One-Way or RT?

Sorry Baron (or whoever moved the thread...wasn't sure where to put it)

And TL...OK, so I think I've got it now...this still changes things for me because initially, I was under the impression that within a 5 day period I could only make a total of 3 on-way trades (which seemed stupid, but then I don't make the rules) then I thought that it was a total of 3 roundtrip trades. Then I thought that if I made 3 'daytrades' on the first day, I would then be able to 'swing' trade for the rest of the period and be fine...but NOW, I finally see that I'd better be careful on where/when I use those day trades because if on the first day I make 3, then I'm done for the rest of the week...regardless.

OK, yup, think I got it....and its nice to know I'm not the only one with trouble understanding this. Now another question which may or may not have anything to do with this rule, but as far as shorting stocks....do the same rules apply?

 

Same rules apply for shorting, a short trade is still a trade.

You may already know but, except for the ETF's, don't forget the uptick rule for shorting stocks. I don't do individual stocks anymore but I think the uptick rule is slightly different for NASD and NYSE stocks - and it doesn't apply in extended hours trade.

 

all this discussion is based upon not having 25G in your account?
when you do you have 25g you have unlimited day trading ?

 

Yep that's right, get the 25g and the rule no longer applies.

You may already know but the rule doesn't apply to futures either.

 

Hi,

Can someone please comment on the following simple scenario:


Fri, May 28 10:00 - Buy 200 CSCO 22.40 (now holding 200 CSCO)
Fri, May 28 10:01 - Sell 100 CSCO 22.41 (now holding 100 CSCO)
Fri, May 28 10:02 - Sell 100 CSCO 22.42 (now holding nothing)


How many daytrades have I made according to the PDT rule? One or two?

Thanks
50

 

I believe it's counted as just one day trade.
Keep in mind that while in theory it shouldn't matter who your broker is in practice some brokers may interpret / enforce the PDT rule somewhat differently.

 

Thanks. Anyone knows IB's policy on this scenario?

 

That is one day trade.

The bottom line on a day trade is that a day trade is a buy and sell of the same security on the same day. If you buy a stock, and then sell in 2 or more pieces it is still only 1 day trade.