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

[JSOP]

Again, I'm sorry if I'm coming across as obtuse, but they are NOT saying you can't trade when your account dips under 25k, they are saying you can't BORROW the brokers money if your account is under 25k. Max, there is a huge difference there.

No the rule is when your capital is below $25K, you are not allowed to day trade. Period. When I first started off day trading, I didn't have $25K, I wasn't allowed to open a trading account at all in those electronic trading firm not even as an cash account. I had to go to a bank and open a regular trading account.

To me as a trader, PDT is NOT about protecting the brokers and even less about protecting the traders. It's really about control, controlling how a person manages his/her money, controlling how he/she trade, controlling how frequently how he/she trades all based on an arbitrary number without knowing nothing about the trader him/herself. This is NOT right. If you REALLY want to protect the brokers, there are other more effective ways.

 

[JSOP]

Max, it's not a regulation thing. Look, I'm a libertarian on these things, you know that. If you want to do lines of blow off your hookers ass while shooting up heroin inbetween your toes, I say go for it. It's your money, your body.

Btw you can't shoot up heroine in between your toes. There is no veins there, only muscles and tendons.

 

[Maverick74]

No the rule is when your capital is below $25K, you are not allowed to day trade. Period. When I first started off day trading, I didn't have $25K, I wasn't allowed to open a trading account at all in those electronic trading firm not even as an cash account. I had to go to a bank and open a regular trading account.

To me as a trader, PDT is NOT about protecting the brokers and even less about protecting the traders. It's really about control, controlling how a person manages his/her money, controlling how he/she trade, controlling how frequently how he/she trades all based on an arbitrary number without knowing nothing about the trader him/herself. This is NOT right. If you REALLY want to protect the brokers, there are other more effective ways.

This is false. If your broker restricts you from trading because your capital is under 25k, tell them you want a cash account. I know for a FACT TD Ameritrade does this. I'm sure IB and ETrade do as well.

 

[Maverick74]

Btw you can't shoot up heroine in between your toes. There is no veins there, only muscles and tendons.

https://luxury.rehabs.com/heroin-addiction/how-to-spot-a-heroin-addict/

"Injecting heroin is preferred by many users because it leads to the fastest high. You may notice needle marks on arms from injections. Some user may inject the heroin in the wrong spot, causing bruising and purple marks. Those who are really trying to hide their addiction may inject in less noticeable places on their body, such as between the toes."

 

[Maverick74]

https://www.warriortrading.com/cash-account-definition-day-trading-terminology/


Cash Account Settlement Rules
For stocks, it is the trade date plus two trading days for cash to settle while for options it is only the trade date plus one trading day for the funds to settle. So if you buy an option on Monday and sell it on Tuesday, then those funds won’t clear until Wednesday.

If you buy a stock on Monday and sell on Tuesday, those funds won’t settle until Friday. This is a major drawback for active traders as you have to wait for those funds to settle before using them again.

One major plus side to cash accounts is you can day trade all you want as long as you have settled funds and won’t be held to the pattern day trading rules in a margin account. There is also no equity requirement to day trade in a cash account, which is a huge bonus for traders who don’t have the extra $25,000 lying around.

 

[JSOP]

This is false. If your broker restricts you from trading because your capital is under 25k, tell them you want a cash account. I know for a FACT TD Ameritrade does this. I'm sure IB and ETrade do as well.

Just telling you what happened to me. My trading capital was less than $25K and I was flatly rejected in opening a pattern day trading account even with all cash. What I feel not right is WHY this arbitrary number? WHY $25K? Why not $35K? Why not $15K? What's so special about this "magic" number $25K??!! And if it's about ensuring the financial health of brokers, shouldn't it be the brokers who determine their policy regarding pattern day traders? It's not like those brokers look forward to failing and they would know about their own business the best, no? All in all, the government has NO business in setting up arbitrary rules with arbitrary numbers.

 

[JSOP]

https://luxury.rehabs.com/heroin-addiction/how-to-spot-a-heroin-addict/

"Injecting heroin is preferred by many users because it leads to the fastest high. You may notice needle marks on arms from injections. Some user may inject the heroin in the wrong spot, causing bruising and purple marks. Those who are really trying to hide their addiction may inject in less noticeable places on their body, such as between the toes."

My gosh that must be extremely painful. Those veins are super fine and small. And the more you use up those veins, the more those veins would collapse which means you would have to jab and jab and jab more to find veins. God, the length people would go to just to get a bit of warmth! Go get a hug or get a fireplace!!

 

[timtrader]

Yes the PDT rule is quite an unfair thorn in ones side.

I think its important to remember this was put into place just after the Dot.Com bust. A number of newbies that didn't know or take responsibility for what they did went before Congress and whined that is was because of chat room hype and other excuses as to why they lost so much of their money (Often about $10K....most of their savings), never taking responsibility for their own actions. That led to pressure from Congress for the SEC/FINRA to do something....thus began this PDT rule.

They could have come up with a better way so it IS time for a modification.

They could require some sort of test, sign a waiver of all responsibility (that wouldn't help), require 100, 200, 500, or even 1,000 trades before being allowed unlimited daytrading ability.

It is not fair because one cannot learn and experience everything needed with a limitation of 3 daytrades within a rolling 5 business days. Cash accounts are not much more helpful because of the clearing time required. Then when you finally gain some success and get up to $25K or more and decide to go for it (place more than 3 trades within 5 business days), your account is labled as PDT. THEN when you screw up and go back under $25k YOU'RE LOCKED OUT from any more daytrades UNTIL you bring your account back up to $25K (either by depositing more cash, or doing some swing trades (not exactly the same skills as daytrading).

People need the freedom to be able to learn. Blowing out their account multiple time may very well be part of that learning experience, especially early on.....it was for me and MANY successful traders from the popular Trading Wizards books. One of the best explanations I read early on of what its like in this learning process would be to go out to your bank, withdraw $10K in small bills, crumble all of the bills up, place them in a wok, go out into your back yard and set them on fire. That's what the learning process can feel like. All the PDT rule does is slow down the process, not stop it.

Regarding some of the other comments on this thread, having margin is NOT the issue. Take ALL the leverage away if need be, just let people daytrade so they can learn....they deserve a fair chance.

The PDT rule is NOT FAIR and should either be removed or FAIRLY modified.

 

[ElectricSavant]

Why does the industry allow the government to step in? Because Senators were getting so many complaints from families and failed daytraders to do something about it. This is the premise of why there is a PDT rule. The Stockmarket is no different than the Casino. It cannot be legitimized by a PDT rule.

ES

 

[traderslair]

Please people stop posting statements that are simply false:

* i read people who say: because of PDT you can't close a trade, the PDT rule is only for entering trades, there is no rule for closing a trade YOU CAN CLOSE YOUR TRADE IF YOUR ACCOUNT IS LOCKED BECAUSE OF THE PDT RULE!

* i read people who say: the PDT rule is unfair because only ppl with more than $25k can daytrade. This is false, in a cash account without margin you can DAYTRADE ALL YOU WANT OPEN AN ACCOUNT WITHOUT MARGIN AND TRADE WITH YOUR MONEY, YOU CAN ENTER AND EXIT 1000 TRADES A DAY WITHOUT A PROBLEM!

There are ZERO arguments why the PDT rule would be damaging.