Best to err on the side of caution. (However, I think the various regulators were bullshitting your attorneys)
Correct on caution. As you suppose, if the sh*t was flying, it was probably coming from such a level that if it fell down on us, it would make one helluva mess.
This entire thread is a b*tch about PDT by those tyring to day trade volatile and tough markets... with less than 25K?! Aside from any rule, I don't think a broker should allow that anyway. But greed, competition and lack of any concern for the client/ customer lets brokers take anyone to trade without a single showing of demonstrable experience, education or training to do so! But my point in this post is: So IF a trader accumulates in excess of 25K THEN the rules would be OK Sounds like the logical conclusion. So "gdz", IF and when you have more than 25K you would accept the rule?! Is that the point here? And further do you (or anyone) see any positives. I do if I understand it correctly. B.T.W. I am not a pattern day trader at present; although my accounts exceed 25K. I have considered doing PDT in 2003, thereby getting more bang for the buck on high prob. positions. Ice
For the "record" I am against government interference with the markets. I have long been an outspoken critic of many policies that give utterly unfair advanatage to the pros. And thus I don't believe the rules on PDT or any other implementation such as that, are appropriate in the markets. But we have witnessed a period wherein every mother, father, son, daughter and child and their pets have been involved in the bubble market. Dentist and successful other were giving up 100K+++ salaries, to trade/day trade. A whole new crop of off-floor online "traders" emerged. And while I think in the US a person should be allowed that freedom to do as they choose with their money... there is a reasonable spin to the PDT rules whereby powers that be are seeking prevent less traders from taking untoward risks. Of course there are more cyncical views of their motives, as well. We all note that these same type of regulatiion by beaurocrats does NOT seem to filter into the lottery or casino forums. Does it?! For example, DO WE ever see government forcing casino owners to stop someone at the door for a credit check to see if credit cards are maxed and/or if they have money to pay next month's rent or mortgage! Or if their children will be hungry if they lose at craps? What about checking if they even know the basic rules for blackjack... or how aobut forcing a customer/gambler to quit when they lose a certain sum or more than X# of hands of BJ! Of course not! Why? Well as far as the Street some of us know that many, many of the so-called "big boys" could not trade themselves out of a paper bag if not for a stacked deck in so many ways many of us note. Further, I have also long been a crtiic of the inequality whereby IRAs, retirement accounts and pension are not allowed to short sell stock (although you may go long puts at some retail houses, or sell puts if fully cash covered), and I am totally against hedge funds being unregulated and accepting money only from high net worth clients willing to fork over 1M, in many cases. But there is some support for the position that day trading with less than adequate funds is a harbinger of poor results. Of course you gotta ask why (and who) decided 25K was the holy grail. Why not 27,500 or 30 or 20K!!? Therefore, if (by legal action) one is seeking to oppose the PDT rule one might seek to show (among other things) that it is purely arbitrary and has no true corrrelation to the purpsoe for which it was ostensibly promulgated. Simply said: if 90% of day traders lose HOW and WHY would having 25K in their accounts make that losing % go DOWN?! Would or might it not just 'increase' the overall losses of the same losing 90%?! Interesting questions. So, rather than PDT rules I say... better the NASD and SEC (for whom I have perpetual contempt) force brokers to require client/traders to take classses, prove experience, file a brief trading plan and the like subject to review and approval of the house. Maybe even answer questions as to goals and the like. Trading is work. It takes no less dedication than any competitive pursuit with high risk/high potential returns on effort. And most importantly it takes time. Jordan took years to win ONE championship; and prior thereto he had apprenticed in H.S. College and years in the NBA. And he had inexplicable talent to begin with! But he had to learn how to win. Just throwing out a few quick ideas into the mix. Ice
seeking to prevent more traders from taking untoward risks. Of course there are more cyncical views of their motives...
I had not read your post when I posted mine... you're point on Nevada and gambling in general is right on. Seems great minds think a like.
Your profile claims that you are a former options floor trader, and that you currently are an options trader. You should follow the several posts in this thread that immediately precede your own. The point of the discussion just before your own posts is that even if you have $25,000 in your account, if you trade options the options value are not counted as part of your $25,000, and you too will be subjected to these restrictions. And no, when we reach $25,000 we will not suddenly have our logic reversed and come to the conclusion that these are good rules.
One of the problems with this that this denies "trying out" strategies with small positions on a small account ...
that doesn't hold up... isn't regular margin of 2/1 enough for a beginner to "try out" trading... someone starting to trade is well-advised not to do large positions in equities, and options particularly I do think that options should be excluded from the PDT rules. Period!