Short sales must occur in a Margin Account. We classify accounts as either Pattern Day Traders (PDT) for those with above $25,000 in Margin Equity or Non PDT for those with below $25,000. If you are classified as a Non-PDT account then you have one times your Cash Available to trade with intra-day. However, you still have a margin account and therefore can short in the account. The only funds available to short with would be your intra-day buying power. If you cover the short those funds are not released back to you to trade with intra-day. You are on a use it and lose it basis. If you have over $25,000 (PDT), but you generate a Day Trading Call (b/c you exceeded your intra-day buying power), you would be restricted to one times cash available until the call was met (Call due T+5) or 90 days if the call is not met. Margin is sometimes complicated to understand, we have a tutorial on our site that may be a valuable resource http://www.terranovaonline.com/tno_main/Faqs_NewMrg.asp Michael Garvey Client Services Terra Nova Online
Thank you Fohat. That is exactly what I intend to do. It seems though there is more to this stupid 25k rule than meets the eye- I still do not understand how one could generate a $19,000 margin call by simply dipping a couple of thousand below the 25k limit. After all the purpose of the margin call is to bring the account balance to the 25k limit. My account with Datek is well above that limit (30k plus), yet, they think another 9k is needed to meet the call and restore the margin status.
ssb, look, how well your account was above the 25K / intraday buying power the day u met the call. dont look at your account value today ! look back ! lippi