Basic PDT Question

E

electron

This does not concern me. It concerns a friend of mine who is considering starting swing trading stocks in the morning here on the West Coast.

Here is the question: if you open a position today and close it tomorrow, will it count towards the 3 trades that you have alloted as daytrades? In other words, is there any danger that by repeating this pattern, that is selling one to two days after buying, you can violate the PDT rules? I would think not, but since I am not particularly familar with these rules as they do not concern me, I would like to know the opinion of those who have to follow them.

TIA...
 
Quote from electron:

This does not concern me. It concerns a friend of mine who is considering starting swing trading stocks in the morning here on the West Coast.

Here is the question: if you open a position today and close it tomorrow, will it count towards the 3 trades that you have alloted as daytrades? In other words, is there any danger that by repeating this pattern, that is selling one to two days after buying, you can violate the PDT rules? I would think not, but since I am not particularly familar with these rules as they do not concern me, I would like to know the opinion of those who have to follow them.

TIA...
More...

hi,
it will not count towards the 3 trade limit. pdt rule comes into affect if you open AND close a position on the SAME stock on the SAME day.
 
If you are going to be swing trading and havent got $25k or series 7 license it might be a good idea to look at CFD'S you will pay a few more cents to get into and out of each trade but you will have no restrictions with doing only a limited amount of trades.As your rewards will be bigger because you are swing trading it shouldnt affect your risk to reward ration or P/L to much.The PDT Rule is pure BS imo.
 
Quote from copa8:



hi,
it will not count towards the 3 trade limit. pdt rule comes into affect if you open AND close a position on the SAME stock on the SAME day.
More...

That's what I thought too, just wanted some confirmation.

Thanks!
 
Quote from StockOperator:

If you are going to be swing trading and havent got $25k or series 7 license it might be a good idea to look at CFD'S you will pay a few more cents to get into and out of each trade but you will have no restrictions with doing only a limited amount of trades.
More...

What are CFD's? Never used anything like that...
 
Quote from electron:



What are CFD's? Never used anything like that...
More...


They are big in the UK,you can open an account with $3,500 and you get 20.1 margin and there is no PDT Rule,the main CFD broker in the UK is www.deal4free.com but they are only good for swingtrading.
You could always check out Greentree,I think they have a way around the PDT rule.
 
Quote from StockOperator:




They are big in the UK,you can open an account with $3,500 and you get 20.1 margin and there is no PDT Rule,the main CFD broker in the UK is www.deal4free.com but they are only good for swingtrading.
More...

Do I read it right? You mean a 20:1 margin, meaning I could get $70K to operate for only $3.5K? Is that really right?
 
So if you have a series 7 license does that mean you can operate with less than 25k for funds and the pdt rules do not apply to you ?

If this is so, is this because having a series 7 affects your professional status or is it for other reasons ?
 
Having a series 7 does now allow you to get around the PDT thru a retail brokerage account.

Having a series 7 allows you to join a prop firm. You lose the SIPC protection, pay professional fee for data.

Even if you have a long term retail brokerage account, you end up paying professional fee for the quote data.
 
Quote from StockOperator:




They are big in the UK,you can open an account with $3,500 and you get 20.1 margin and there is no PDT Rule,the main CFD broker in the UK is www.deal4free.com but they are only good for swingtrading.
You could always check out Greentree,I think they have a way around the PDT rule.
More...


According to deal4free.com site
"
Unfortunately, we are unable to accept any applications to open new accounts from US residents, and all business with past clients has been terminated. This position is subject to review, and if circumstances change and you would like us to contact you again, if and when this position alters, then please e-mail your request to info@deal4free.com. We apologise for any inconvenience this may cause, but this is due to circumstances beyond our control. We will endeavour to contact you if and when we are able to resume offering services to US residents. "
 
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