ATTENTION: Ever affected by PDT Rule please contact me to join lawsuit and petition FINRA

[truetype]

PDT rule and the capped leverage and now banned retail forex by SEC are all about sweeping everybody's accounts into mutual funds with the Big Banks/Brokerages.

Uhh, what's stopping a small account from buy/holding SPY, TLT, etc. rather than a mutual fund?

 

[AbolishPDT]

This is a joke right? First of all, there is a very easy way to get around PDT. Open a cash account. No more PDT. Problem solved. No, you want you use leverage. You think you are entitled to borrow money and leverage that money with daytrading and think this is an entitlement? On what planet? Almost no country in Europe allows most of the leverage we allow for retail investors for securities. Even bitcoin is a 100% cash transaction. It's the main reason why regulators are not going after them. The second you bring leverage into bitcoin you will see mountains of new regulations. I'm sorry Murray, you are dead one wrong here.

One reason brokers support the PDT rule even though on the surface one would think it costs them money (reducing trading), is that there is a huge cost for them to monitor these tiny gambling accounts. The amount of effort needed to babysit and hand hold these 5k accounts who are selling naked options and running their accounts into the ground is a major headache. It's why portfolio margin accounts have 100k minimums. You are not going to win this and you have no empirical evidence to back up your claims. Again, want to get around it? Easy, open a cash account. Done and done.

With all due respect, " a cash account"? So with $2500 account one should wait till funds settle 3 days to be able to place another trade? Or you are suggested they only trade penny stocks? WTH.... Also, the brokerage accounts have zero risk with debit and credit spreads, it is all automated, especially on think or swim, no risky naked options can be executed. If anything, this PDT rule causes tremendous losses by forcing traders to hold losers into overnight gaps, or preventing them from taking a profit when it is presented. No one has adequately rationalize this rule which appears unconstitutional, and seems to be implemented at the behest of big banks in 2001 at the height of small trading accounts with many mom and pop broker dealers eating away at Big papa's pockets. This rule, promulgated as a pretext of security, is just to crowd out the little guy. This is bogus and we all know. The reason this prevailed so long is there is not a strong enough lobby to crack down at this self regulating body to nix this. This body seems to be sold to the big boys. Peace all.

 

[Sig]

No one has adequately rationalize this rule which appears unconstitutional, and seems to be implemented at the behest of big banks in 2001 at the height of small trading accounts with many mom and pop broker dealers eating away at Big papa's pockets.

"Unconstitutional" means that something is prohibited by the U.S. Constitution or one of it's amendments. Which specific portion of the Constitution would prohibit this, the Third Amendment? The 21st? Have you actually ever even read the Constitution?

 

[vanzandt]

With all due respect, " a cash account"? So with $2500 account one should wait till funds settle 3 days to be able to place another trade? Or you are suggested they only trade penny stocks? WTH.... Also, the brokerage accounts have zero risk with debit and credit spreads, it is all automated, especially on think or swim, no risky naked options can be executed. If anything, this PDT rule causes tremendous losses by forcing traders to hold losers into overnight gaps, or preventing them from taking a profit when it is presented. No one has adequately rationalize this rule which appears unconstitutional, and seems to be implemented at the behest of big banks in 2001 at the height of small trading accounts with many mom and pop broker dealers eating away at Big papa's pockets. This rule, promulgated as a pretext of security, is just to crowd out the little guy. This is bogus and we all know. The reason this prevailed so long is there is not a strong enough lobby to crack down at this self regulating body to nix this. This body seems to be sold to the big boys. Peace all.

Its our job to protect you from...
.....you.
Just give thanks and move on.

 

[OptionsOptionsOptions]

Its our job to protect you from...
.....you.
Just give thanks and move on.

How does the PDT rule protect the trader?

 

[Real Money]

How does the PDT rule protect the trader?

If there was no PDT then a guy could just get like $5000 and buy like $20,000 worth of penny stocks using RegT. That would be insane.

Let's say homeboy longs a 4 dollar stock at full intraday margin, or even one of those triple bear ETF's LOL

Then the stock drops 30%. Well, all of the sudden homeboy's account is debit something like $1,500. The clearing firm ends up taking the loss because he walks and says "sue me" or whatever.

Basically, if you can't even scrape together 25k then you shouldn't be trading and the stock broker shouldn't have to extend a cash margin loan to you.

I think it actually protects the stock brokers. Basically, it means that brokers don't have to give margin loans to underfunded accounts. It's a credit risk.

 

[vanzandt]

How does the PDT rule protect the trader?

The same way labels on car batteries protect us from drinking the acid? I dunno.
Its America man.... we make rules affecting millions due to the actions of a few.
Wait till the dust settles on Covid, we're gonna have a whole new plethora of stupid rules to bitch about.

 

[Renzo]

If there was no PDT then a guy could just get like $5000 and buy like $20,000 worth of penny stocks using RegT. That would be insane.

Let's say homeboy longs a 4 dollar stock at full intraday margin, or even one of those triple bear ETF's LOL

Then the stock drops 30%. Well, all of the sudden homeboy's account is debit something like $1,500. The clearing firm ends up taking the loss because he walks and says "sue me" or whatever.

Basically, if you can't even scrape together 25k then you shouldn't be trading and the stock broker shouldn't have to extend a cash margin loan to you.

I think it actually protects the stock brokers. Basically, it means that brokers don't have to give margin loans to underfunded accounts. It's a credit risk.

Then just remove margin on sub 25k accounts. The goal here is to remove the 3 limit and 3 biz day fund settlement. That's it. I honestly don't understand why transactions handled electronically require 3 days to settle. That makes no sense to me. The exchange that allows for fast transaction and verification via margin should be applied to cash accounts.

 

[Sig]

Then just remove margin on sub 25k accounts. The goal here is to remove the 3 limit and 3 biz day fund settlement. That's it. I honestly don't understand why transactions handled electronically require 3 days to settle. That makes no sense to me. The exchange that allows for fast transaction and verification via margin should be applied to cash accounts.

Stocks have been T+2 since 2017, options and FOPS and T+1 and futures are same day settlement. I'm not aware of anything thats T+3.

 

[AbolishPDT]

While you're tilting at windmills, why allow a portfolio margin account minimum as @maverick points out? The accredit investor concept is also unconscionable under your logic, so that also has to go. All hedge funds and private equity funds must accept any customer as an LP regardless of how much they wish to invest. Anyone should be able to open a brokerage account at Goldman, not fair that only the rich have access to that right.....And you could go on and on. Bottom line there's tons of precedence for setting limits on participation in the financial markets based on minimum amounts. And little if no precedence in the other direction. Add to that the massive influence that groups like AARP and consumer protection organizations have, and you've got neither a legal case nor a case in the court of public opinion. Just vent and let it go, this isn't going to be a money maker for you.

THEN LET US DAYTRADE OPTIONS WHERE THERE IS NO BORROWING INVOLVED! WHAT, YOU WORRIED THE OCC WON'T CLEAR THE TRADES, IS THE THE SO CALLED BIG RISK?? WHOLE THING IS A SCAM.