I can't agree more. It is an illusion which makes you think you can do better without day trading. But that can be many pin-and-kill for undercapitalized investors. Check THC and OMG for the latest instances. Check every stock options 20 days close to expiration. Behind every story of intraday volatility, there are victims of PDT margin rules. They did nothing wrong. They don't even use the margin of their brokers. It's time to abort this nonsense now.
If any of you are interested, I have thought of a way to get around the PDT ruling. It's not conventional and it's not a complete solution and it does require a little bit of messing around but in the end you'll be able to place a few trades per day. I'd rather not post it in public though. Send me a Private Message if you're interested.
"For you probabilty guys What has the best chance? a) change the PDT rule. b) go prop. c) raise more money." I apologize I am a new member starving for all the information that I can obtain from others here. Can you please tell me what go "prop" means?
Prop means "proprietary firm". They are trading firms that allow you to trade with their money, and you split with them any profits you make. The Pro Firm topic in the Direct-Access Brokers category below is devoted to these types of broker firms.
If you all want to know why the pdt rule exists, look no further then your local yellow pages and look up "Attorney:...It's not the SEC, NASD or your Senators.....I worked compliance for many years and handled hundreds of bogus complaints...why? Because nobody in this country is responsible for their own actions. I would talk to clients who would trade the crap out of their account and lose 50, 100, even 200k in a year....but then they would go and tell their wife "it's not my fault...somebody should have stopped me".....Then the lawyers came in, the complaints filed in and finally the regulators stepped in. Im not saying anyone on this board is like that, but how many on this board know somebody who has sued their firm because they lost money?...I remembered E*trade lost a suit from some college kid because he traded away his medical school money! unsolicited!
Thanks so much for your answer hii a_ooiioo_a. I assume that you have to have alot of equity in order to trade for a proprietary firm, will they let beginning traders trade with them? Also which proprietary firms are the best and do you have to provide a minimum balance? I know through other accounts the 25k equity rule applies. Thanks for any info.
In some cases u put up no cash....take ur series 55 and ur trading......worldco, redwood trading...are a few...
The PDT rule increases the risk of loosing money. PDT decreases liquidity and reduces brokers' commissions. Thus, PDT is dangerous for the small trader, for the brokers and for the market. Traders are exposed to more risk i.e. lose more money, brokers lose commissions, the market loses liquidity, due to the PDT rule. It does not protect, it endangers all market participants. Show us who does the PDT rule protect?! So, I guess, we have to see more lawsuits from traders that have lost their money due to the PDT rule. Don't simply quit , sue those that came up with that nonsense (PDT) for margin accounts and imposed it on cash accounts and options, thus putting in danger traders, brokers and market liquidity.