You guys really think this is the time to get rid of this rule? i really dont see any goverment office getting rid of a rule that stops people from taking leverage to buy something right now. especially people who cant (or choose not to) come up with 25k. whats next a ET post of someone complaining that they cant get a subprime loan on a house with 0% down?
Exactly. Never going to happen. It's all about the government protecting the "stupids" from themselves. Look what happens when you don't. A la subprime mess. Forget stocks. Trade futures.
Ironic. Seems to me it was the gov that encouraged this stupidity, and now they are going to protect them from it? Agree. Hopefully they will not be subject to the upcoming avalanche of new regs.
It has nothing to do with leverage. It has to do reducing risk by being able to trade in and out as needed. If you make 20 trades but can only bail out the next day that's fuckin stupid. A large percentage of your trades have to be done "according to the rules." and not according to how the position is moving FOR or against you. It's not safe. In addition it kills the little guy. Your arguments is baseless. You're saying that people with under 25k are less intelligent than some people with 5 million? Comon... But you wouldn't know that if you don't trade. So my apologies. Yup that's the next post. You know....Yahoo! message boards are a good place for you.
Yeah, that's their way of saying, "oops." I doubt it. If anything, the 60/40 rule on 1256 contracts may come under fire, again.
Seems to me that if they wanted to limit risk for daytrader newbies then they would limit the account on the low side. Say 5k is all you could loose. I was banned from trading the qqq, way back when, and it wasn't because I was losing money. I was kicking the MM's ass. The PDT rule is a dirty rotten scam.
dude you need to relax. first can you tell me where i said people with under 25k are less intelligent? Second who said you cant trade in and out? you just need to follow the rules put in place after every wannabe daytrader lost a bunch of money. you can be a pattern day trader but you cant use leverage. and you can take out of acouple intraday trades if you need to manage risk. i cant believe in 2008 you are arguing with me about buying a finical instrument on borrowed money. anyway i found this on the yahoo message board, and can foward you my bloomberg and cnbc interviews if you need more references http://www.traderdaily.com/magazine/article/22821.html Keith O'Malley, 30 Another grizzled 30-year-old, continues to give Hold Brothers -- and prop trading in general -- a good name. In just the first five months of 2008, O'Malley reportedly matched his entire profits of 2007 (he was said to have made a killing the day BofA announced it was taking over Countrywide), and he is apparently on a pace to make eight _figures this year. Not surprisingly, he's considering starting his own hedge fund.
Well for my 2 cents- I started as a piker with a $5,000 account teaching myself to trade options. I could afford to lose that much and I didn't want to risk more than that. The PDT rule did hinder me from exercising the scalping strategy I was using because when you can only do 3 daytrades a week, I found myself reluctant to take small loses and a few big losses wiped out all my winning trades. Under the PDT rule, opening a $100,00 account and dropping $75,000 of it while you learn the game is OK, but limiting your loses by keeping your account small isn't. I think it should be just the opposite.
market makers know it's not feasible to trade 100 shares if you account or portfolio size is over $50,000 that is what these small time traders with under $5,000 stock trading accounts were doing. they might as well get a real job. SOES are freeloading off the market makers and larger traders. prior to 2001 index futures was not tradeable either or volume was like 10% of today. today daytraders can just trade index futures assuming they can trade. but again people who trade stocks tend to be potential investors of the stocks they trade.