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$25,000 minimum for daytrading needs to be changed
- Thread starter Nostradamus357
- Start date
Quote from Tranbo:
This rule flourish the prop shop/trading firm capital outfit...not to mention it is done nothing to protect day trader but drove them to prop shop and the majority lose money because prop shop by design --majority --does not favor trader.
Here is typical prop shop setup:
-5K risk deposit
-Software fee, commission.
-No Holding overnight
-Trading with 100 share lot minimum
- Split Profit
With this arrangement a few bad trade and you are out of the game.
Without 25k requirement for PDT the same trader might have a chance with retail brokerage.
- Share size to position -- retail trader can do odd lot-- trading less then 100
- Holding overnight or long term trade is possible avoiding the intraday volatility.
- Last but not least. Protection against Fraud!
So Mr. Regulator please repeal this law!
5k deposit does not sound too bad if you can get it back.
What is worst is the 5-12k training or enrolling fees that are non-refundable fees even if you never loss a penny.
Many prop shops have become prop scams the last few years. Pay the scams 5-12k to trade "our capital" and you are not allow to lose more than $30/day.
Quote from Tranbo:
This rule flourish the prop shop/trading firm capital outfit...not to mention it is done nothing to protect day trader but drove them to prop shop and the majority lose money because prop shop by design --majority --does not favor trader.
Here is typical prop shop setup:
-5K risk deposit
-Software fee, commission.
-No Holding overnight
-Trading with 100 share lot minimum
- Split Profit
With this arrangement a few bad trade and you are out of the game.
Without 25k requirement for PDT the same trader might have a chance with retail brokerage.
- Share size to position -- retail trader can do odd lot-- trading less then 100
- Holding overnight or long term trade is possible avoiding the intraday volatility.
- Last but not least. Protection against Fraud!
So Mr. Regulator please repeal this law!
- Everyone pays commission - prop shops commissions are a lot lower than your TD Ameritrade account
- Real prop shops don't require a deposit
- No one makes money with 100 share positions unless you're catching 20 point moves in CMG on a regular basis (sarcasm implied)
- A few of my friends trade at a retail-prop shop and they actually put down deposits and they do NOT split profits with the firm.
- Protect yourself against fraud by doing your research before joining a prop firm
I, too, was very annoyed by the 25K requirement, but I also don't see it being repealed for the many reasons listed here. Perhaps #1 is that day-traders were unfairly blamed for wild market swings -- a convenient scapegoat like shorters being blamed for balloon implosions which were going to happen anyway. Day-traders are generally regarded with a combination of suspicion, envy (for those who can do it well), and as leeches who just suck more blood out of the market as if speculation should be illegal.
Of course, the facts are very different. Most day-traders end up giving money to the market.
The real illegal bloodsuckers are the HFTs which front run and the SEC does nothing about this, of course. I say, of course, because these days the head of the NYSE and others and the SEC (not to mention 7/8 of Obama's financial appointees) are all of the same ilk with names like gold___, silver___ and copper___, etc. Also, not to mention the heads of the FED and most all of the money in the USA -- all in the hands of a 3% minority bent on any immorality which can put them ahead of the other 97%.
As regards PDT -- it's a non-issue to everyone but the few who want it repealed. Therefore, it will likely never be repealed for lack of political sympathy and certainly no political will or power.
Just get the cash up like I did or look for another way to make money in the markets -- or elsewhere. Life is far from fair -- especially these days with an insidious group pushing their get the goyims agenda.
Of course, the facts are very different. Most day-traders end up giving money to the market.
The real illegal bloodsuckers are the HFTs which front run and the SEC does nothing about this, of course. I say, of course, because these days the head of the NYSE and others and the SEC (not to mention 7/8 of Obama's financial appointees) are all of the same ilk with names like gold___, silver___ and copper___, etc. Also, not to mention the heads of the FED and most all of the money in the USA -- all in the hands of a 3% minority bent on any immorality which can put them ahead of the other 97%.
As regards PDT -- it's a non-issue to everyone but the few who want it repealed. Therefore, it will likely never be repealed for lack of political sympathy and certainly no political will or power.
Just get the cash up like I did or look for another way to make money in the markets -- or elsewhere. Life is far from fair -- especially these days with an insidious group pushing their get the goyims agenda.
Quote from billyjoerob:
I emailed a lobbyist at one of the discount brokerages . . . He said there is no chance of this being repealed. Day traders are not exactly the most sympathetic constituency, and it's not on anybody's agenda. He didn't say this, but I think the brokerages got the 4x margin rule in exchange for restricing the PDTs. 4x $25k+ is probably more than multiple day trades in a $2500 account.
How about an adjustment to the initial outdated regulation? Instead of 3 day trades in a 5 day period, what about 5 or 6 in a 5 day? Not every trade is going to be profitable. This is a proven fact. As the rule sits, the little guy doesn't have a chance.
Here's an example of an issue I had in the last few weeks with CIEN where I kept on getting bumped out. My intention was to catch a swing and IMO and for my purposes the stock fundamentally and technically looked good to me, but the hft's had control. Heh... look at it now... sucks. If I would've had more bullets to fight with, I might of had a chance.
The reality is that with the choppiness in today's market place induced by hfts trading with themselves, the small guy doesn't have a chance with the outdated initial regulation of 3 in a 5 day.
With at least updating to something more realistic, the rule stays, but it adjusts/adapts to the way the market really is TODAY.
Win/Win
Who here can make a webpage to gather signatures? I'd be more than happy to work with you on developing this.
I would support something that required a license or test to day trade. There should be no account minimum I agree. There is no reason people should be excluded from the markets due to their account size. If the government feels a need to protect people from day trading, make them take a 300 dollar test or something.
Quote from ksmetana:
I would support something that required a license or test to day trade. There should be no account minimum I agree. There is no reason people should be excluded from the markets due to their account size. If the government feels a need to protect people from day trading, make them take a 300 dollar test or something.
I agree. If people want to daytrade from their own home with their own money and take their own risk they should be allowed to do what they want to do. I'm sure the PTD rule has prevented a lot of gambler-types from ruining their families, but I guess it's their right to do so to the chagrin of their wives and kids.
Although, I don't know how you would test for something like daytrading. I have a Series 7 license and I can't say that most of the stuff that I learned to pass that test help at all as a daytrader.