PDT question?

Discussion in 'Order Execution' started by ER9, Feb 14, 2004.

  1. ER9


    If I buy 1000 shares of stock XYZ and it runs up nicely during the trading day, if I sell 990 shares at the end of the day and keep the remaining 10 shares until the next day, wouldn't this prevent a pattern day trade?

    or, suppose I do this with several stocks, if I keep an small number of shares of each until the next day could I avoid the PDT rule?

  2. Yes, it still counts.

    As an expert on the subject, I recommend you learn the PDT rules, understand why they exist, and then forget about them. You don't need to interfere with PDT rules in this bull market. If you do, well, you may have some problems.
  3. qazmax


    the 990 counts as a round trip and the 10 is carried overnight.

  4. Let's say I do the following all on the same day:

    Case #1

    1. Buy 500 shares MSFT
    2. Buy another 800 shares MSFT
    3. Buy another 300 shares MSFT
    4. Sell 1600 shares MSFT at once

    How many PDT? 1 or 3

    Case #2

    1. Buy 500 shares MSFT
    2. Buy another 800 shares MSFT
    3. Buy another 300 shares MSFT
    4. Sell 1000 shares MSFT at once
    5. Sell 600 shares MSFT later in the day

    How many PDT? 1, 2, or 3

    Just wondering so I get the counts right.
  5. qazmax


    3 and 3

  6. Lucrum


    I believe both of these guys are right.
    I have heard of people opening multiple accounts as a way of trying to skirt the PDT rules, but then if you can afford several accounts you probably have more than $25K anyway. You ever considered futures? You get a slight tax advantage, you don't have to record all your trades and theres no ridiculous PDT rules.
  7. MRWSM


    Wouldn't it be 1 for Case #1 and

    2 for Case #2?
  8. let's say MSFT is at 25
    500 * 25 = 12500
    800 * 25 = 20000
    300 * 25 = 7500

    Why do you want to be worried by the PDT rules in this example? Add some money and get the freedom!

    I know some wonderful deals of loans. It is amazing way to get cash to buy stocks. If you are interested, you should look for a good deal for yourself. It is very easy.

  9. tuna


    If its one order being filled no problem but if thats 3 buy orders and then its followed by a sell later in the day thats counted as 3 daytrades.
    Same in case 2 ,they work off the buy orders not the sell orders
    so 5 buy orders followed by 1 sell would equal 5 daytrades

    Alternatively 1 buy order followed by 2 sells would be only counted as 1 daytrade
  10. qazmax


    It goes off the opening position....

    buy 100 + buy 100 + buy 100... then sell 300 = 3 trades

    buy 300... then sell 100 + sell 100 + sell 100 = 1 trade

    A tough question for your broker arises when you place an order to buy 300 and get filled on 100, then modify the order and get filled another 100, then modify and get filled on the last 100.

    Many firms use a "cancel and replace" when the customer choses to "modify". So you might think that this is 3 orders. But, the firm is the responsible party for answering to the regulators and sharing their method of determing PDT, not the exchange or ECN. So as long as your firm knows it is the same order they can consider those cancel replaces as 1 trade.

    #10     Feb 19, 2004