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

[Maverick74]

I do.
Its because once Mav makes a post be it right or wrong.... he's gonna argue it till he turns blue or dies. Gotta love him though.

Zany, I'm not defending it. I simply stated that when ANYONE in life "borrows" money from someone, be it a firm or an individual, that person who does the borrowing doesn't get to make the rules. This applies across the board. That was the only point I made. Traders are not entitled to anything, and they sure as hell are not entitled to do whatever they want on borrowed money. Other than that, as I've stated before, you can do anything you want in my book with your own money. In your case Zany, that means shorting HLF.

 

[vanzandt]

Zany, I'm not defending it. I simply stated that when ANYONE in life "borrows" money from someone, be it a firm or an individual, that person who does the borrowing doesn't get to make the rules. This applies across the board. That was the only point I made. Traders are not entitled to anything, and they sure as hell are not entitled to do whatever they want on borrowed money. Other than that, as I've stated before, you can do anything you want in my book with your own money. In your case Zany, that means shorting HLF.

I know Mav, but its like I pointed out.... these guys are STILL borrowing money.
I mean truly.... what is safer(?)... shorting 500 HLF overnight with borrowed money, or opening and closing it in 5 minutes with borrowed money to make $100 on a 20 cent move? The 5 minute play is much safer for both the broker AND the trader. Short 500 overnight and what happens when Oprah says she enjoys a good Herbalife spinach and dehydrated bone-marrow milkshake?

Another thing someone pointed out is say you are trading with 20K (ie 80K buying power) and you open 3 long positions.... and put stops under them. The market heads south and all 3 trigger their stops... that individual's account is frozen for 90 days. How the hell is someone gonna learn how to trade? Most Millennials probably don't have 25K sitting around that they can park and not use.

Besides... borrowing money and losing it MAGA's. Thats what our country was built on.

 

[Maverick74]

I know Mav, but its like I pointed out.... these guys are STILL borrowing money.
I mean truly.... what is safer(?)... shorting 500 HLF overnight with borrowed money, or opening and closing it in 5 minutes with borrowed money to make $100 on a 20 cent move? The 5 minute play is much safer for both the broker AND the trader. Short 500 overnight and what happens when Oprah says she enjoys a good Herbalife spinach and dehydrated bone-marrow milkshake?

Another thing someone pointed out is say you are trading with 20K (ie 80K buying power) and you open 3 long positions.... and put stops under them. The market heads south and all 3 trigger their stops... that individual's account is frozen for 90 days. How the hell is someone gonna learn how to trade? Most Millennials probably don't have 25K sitting around that they can park and not use.

Besides... borrowing money and losing it MAGA's. Thats what our country was built on.

Zany, You keep reading my chart wrong. I'm not talking about the efficacy of the rule. I'm talking about the OP first post on the thread. It's not about Risk, Oprah, daytraders, your mommy, Millenials, etc. When you rent an apt, lease a car, borrow money from a bank or yes, trade on margin, you play by the rules of the proprietor of that capital. Outside of discrimination against race, gender or ethnicity which is prohibited by the interstate commerce clause, the owner of the asset can properly decide how they want to lease out their asset. THAT is what makes America Great!

Furthermore if the OP had a serious argument, he would first start with portfolio margin accounts with a 100k minimum. Those accounts were created SPECIFICALLY for the purpose of risk mitigation. Aren't ALL traders entitled to that? I'm not saying they are. But the OP should start there and work his way down or at least include them both.

 

[aquarian1]

Nothing in this stupid American rule makes America great.
It did not use to exist in trading.
Was not America great then?
Emotive argumentation such as this are plainly childish.
The supposed reason was to protect traders from themselves but of course that is garbage.
There was a big crash in the markets in 2000 and the Sec wanted to be seen doing something - and taking action against the fed was not in the cards.

This rule (PDT)does not exist outside the states because other countries saw that it was plainly a stupid rule put into effect to "show we did something" after the horse has left the barn and run a mile down the road.

There is a rule that all traders must be treated EQUALLY - small or large. That applies across the board to news releases, and order execution. The rule violates this basic principle.

Spurious arguments like lenders can do anything simply show the vacuous thinking that permeates the board. Large accounts also borrow and the rule doesn't apply to them. You throw in a red herring ("lenders can do anything") and drag the discussion down the alley and mug it, and degrade the board in doing so.

 

[vanzandt]

vac·u·ous/ˈvakyo͞oəs/
adjective
having or showing a lack of thought or intelligence; mindless.
___________
I'll be damned....I learned another new word.
Good one to toss around ET.

 

[volente_00]

Not sure it's still the case but I do know back in 2001 you could trigger PDT daytrading only options in a cash account with Datek. Is that still the case today ?

 

[OldBoldTrader]

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 really the gist of the whole rule. JSOP is a little off about 25K cash account, but he is correct about the reasoning of the rule. Fat cats say its to "protect" the investor or trader. This is patently false. Maverick74 says its to protect the firm from having to service the little guy. (not sure that sounded quite right..anyway). Maverick74 is right, but screw that reasoning. He is either a big guy as a trader or making money from the trading industry as a seller of trading service. The other guy, from lime brokerage, states the typical hogwash from and insider in the bizness. Both of these guys have been around a LONG time, and can be grouped into the Fat Cat bunch. Just an assumption. Put them at the beginning of their trading careers and I would bet one of my account trading units that they would have a view that is 100% the obverse.

The PDT rule, along with the aspects of Dodd Frank that crushed the deposit prop firms (from which I made most of my trading money in the 2000s), and the crushing of leverage and other regulations that basically closed the advantages of retail Forex in the US, are ALL examples of the large guys seeking to eliminate competition from smart, hungry, small guys.

This is the essence of all regulation in the financial industry. It's the influx of the Govopoly as it applies to trading (thanks from one of my mentors). It seeks to concentrate capital to the top. Once aspect of concentration of capital is restricting the freedoms of those sharp (but probably less capitalized or even smarter wanting to start with small capital) new traders that stand only to benefit from the advantages of leverage, mark to market accounting, same day or next day settlement, k-1 schedule E simple tax forms, interest rebates, and on and on and on and on.

So, traders today have to adapt and figure things out. Yes, this thread makes me long for those early days. I started out a Lieber and Weissman in 1998. Those of you older guys might have known Gene Weissman. In addition to trading, I used to go around giving talks to trading groups about the advantages we had over retail traders. This was before the PDT rules and all of the other nonsense. In fact, I lost a few stakes at LWS before getting employed by one of their sub group managers, then I killed it, so to speak. The climate now for a beginning trader like I was 20 years ago absolutely sucks compared to what I had. Leverage is necessary for a disciplined trader. Or lots of non-leveraged cash.

The restriction of leverage, and restrictions on the behavior of traders only serves to limit the number of trader who will be upwardly mobile in the industry and challenge the capital reserves of the FAT CATS. In every business sector, the largest risk any company has is a threat to its capital. If you don't believe this is also rampant in the financial industry you have just not done your homework and have not spent enough time thinking about how this part of the world works.

Do you think the govt or financial firms care if you go bust? they dont. Most financial firms who will be a conduit to you clearing trades want your action ( commissions) and don't care about your equity. They want you to grind and grind it away.

What the gov't doesn't want, and want large players in the financial industry dont want is a small group of guys or single traders that can make an impact on their capital.

This is the only significant reason PDT, and other "reforms" have been legislated in the financial industry. Before entering into any business, perform your due diligence, and then you learn. Regulations seek to limit opportunity and keep the status quo in place, not to "protect" small entities from their actions.

 

[JSOP]

The PDT rule, along with the aspects of Dodd Frank that crushed the deposit prop firms (from which I made most of my trading money in the 2000s), and the crushing of leverage and other regulations that basically closed the advantages of retail Forex in the US, are ALL examples of the large guys seeking to eliminate competition from smart, hungry, small guys.

This is the essence of all regulation in the financial industry. It's the influx of the Govopoly as it applies to trading (thanks from one of my mentors). It seeks to concentrate capital to the top. Once aspect of concentration of capital is restricting the freedoms of those sharp (but probably less capitalized or even smarter wanting to start with small capital) new traders that stand only to benefit from the advantages of leverage, mark to market accounting, same day or next day settlement, k-1 schedule E simple tax forms, interest rebates, and on and on and on and on.

So, traders today have to adapt and figure things out. Yes, this thread makes me long for those early days. I started out a Lieber and Weissman in 1998. Those of you older guys might have known Gene Weissman. In addition to trading, I used to go around giving talks to trading groups about the advantages we had over retail traders. This was before the PDT rules and all of the other nonsense. In fact, I lost a few stakes at LWS before getting employed by one of their sub group managers, then I killed it, so to speak. The climate now for a beginning trader like I was 20 years ago absolutely sucks compared to what I had. Leverage is necessary for a disciplined trader. Or lots of non-leveraged cash.

The restriction of leverage, and restrictions on the behavior of traders only serves to limit the number of trader who will be upwardly mobile in the industry and challenge the capital reserves of the FAT CATS. In every business sector, the largest risk any company has is a threat to its capital. If you don't believe this is also rampant in the financial industry you have just not done your homework and have not spent enough time thinking about how this part of the world works.

Do you think the govt or financial firms care if you go bust? they dont. Most financial firms who will be a conduit to you clearing trades want your action ( commissions) and don't care about your equity. They want you to grind and grind it away.

What the gov't doesn't want, and want large players in the financial industry dont want is a small group of guys or single traders that can make an impact on their capital.

This is the only significant reason PDT, and other "reforms" have been legislated in the financial industry. Before entering into any business, perform your due diligence, and then you learn. Regulations seek to limit opportunity and keep the status quo in place, not to "protect" small entities from their actions.

Absolutely agree. 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.

 

[iceman1]

NB: We posted the INCORRECT EMAIL in the first thread post. Correct email is:

MSP@mspchicagolaw.com (NOT mps)

 

[iceman1]

I am a semi-retired litigation and trial attorney in Chicago; and have also been involved at various times with the financial markets, since the very early 1980s. Also passed series 7 a few years ago.

The PDT rule (promulgated in 2001) is unconscionable, unconstitutional, capricious, harmful and unfair in multiple ways. Moreover, it is the poster-child for the pervasive disparity and inequality in our society between the moneyed-gluttons who have more money than they should ever have or will ever need -and- all other world citizens who want to participate in the financial markets with a level playing field and less unconscionable and capricious regulation. Further there is no way this rule should ever have included options!

The gluttons don't want Dodd-Frank or much of any regulation. However they stand by and allow this obscene regulatory rule with little to no purpose to persist and affect those who are not rich and/or who don't always have access to the arbitrary threshold required to be allowed to do more than a few "day" trades. Yet high frequency trading is AOK! Meaning it is allowed by FINRA and SEC and Congress.

I have asked many over at TD Ameritrade to forward my objections to their decision-makers who might actually show integrity in asking the brain-dead at FINRA to lose this Rule once and for all. To no avail.

Above $25,001 and you can trade unlimited. Devil may care. At $24,999 you can only make 3 weekly round trips before placing your account in jeopardy of being locked. Further if you carry a position overnight and then open the same underlying ETF or equity and/or option series/strike the next day and then close (what you think was the position held overnight) this absurd and intellectually weak PDT rule will designate that as a "day trade" which might result in your account being locked for an EM restriction. Then, IF your account is locked via EM it is not locked for 5 or ten days BUT FOR NINETY DAYS.

Yep the corrupt member clown firms at NASD (now FINRA ) back in 2001 passed regulation whereby the less well-off have their accounts locked 90 days for making 4 days trades in a week; while Bear Sterns and Lehmann Bros. were allowed by NASD and SEC, during the same time period and decade, to have unlimited exposure to risk with little to no meaningful regulation. We all know how that ended.

It is hard to write this without taking Dramamine since I find this and all similar regulation to be unconscionable in its unjust and unequal treatment of those without large financial reserves. Just like the rich gluttons don't like regulation for, inter alia, its chilling effect on job growth etc. Now, once again the bank and wall street firms are seeking less and less regulation. But do you see FINRA doing anything about an antiquated PDT rule? No of course not. What special interest is going to lobby or petition FINRA and the SEC to repeal. It takes guys like me who will devote significant time and resources for the public good. While wall street pays millions to high-priced lobbyists and contributes to Congress to water down Dodd-Frank and similar regulation!

**I am looking for individuals to serve as plaintiffs in a lawsuit and other proceedings before FINRA, the SEC and in state or Federal court**.

IF interested in standing up and being counted; in doing something meaningful to oppose this Rule, for yourself and all others who could or might (and have already) been impacted by same, please email me at MSP@mpschicagolaw.com and or text me me at 312.622.7733 with full name and all other pertinent contact information including brief history of if, how and when this PDT rule impacted you or someone you know.

Think you can't make a difference? I know people can. This is your chance! It's about principle and keeping the playing field level for all.

NB: We posted the INCORRECT EMAIL in the opening post. Our correct email is:

MSP@mspchicagolaw.com (NOT mpschicagolaw.)