Explain margin requirements and the $2000 minimum

A

Amagaldu

Hello to everyone,

I am interested in trading around 3 days a week, but this is of course not possible with the cash account, so I woupd have to open a margin account. Question: The minimum margin requirement is $2000. A pattern day trader is one who has $25000 in equity. If I were to deposit this $2000 into a margin account, could I trade 3 times per week without violating Regulation T? Would I have to risk the whole equity when placing a trade, or can I just limit it to say $1000? Thank you in advance.

P.S. I know I am asking stupid questions and liekly will receive a good scolding, so please if you would like to do so, please Pm me so I can aitomatically send the messahes to trash. Thank you.
 
You can open a position and close it during the same day 3 times only in a 2 month period or so - otherwise you will violate the Pattern Daytrader rule.

The margin account is something the broker let's you do. The Pattern Daytrader rule is governmental law.

They have nothing to do with each other.

If your broker let's you open a margin account with $2k, you can open (and margin) a position but you won't be able to daytrade (opening and closing the same position on the same day) equities more than 3 times in the above mentioned 2 month period.

BTW, the Pattern Day Trading rule does not apply to futures - just to equities, equity options, and maybe some other issues (stock futures?)





Quote from Amagaldu:

Hello to everyone,

I am interested in trading around 3 days a week, but this is of course not possible with the cash account, so I woupd have to open a margin account. Question: The minimum margin requirement is $2000. A pattern day trader is one who has $25000 in equity. If I were to deposit this $2000 into a margin account, could I trade 3 times per week without violating Regulation T? Would I have to risk the whole equity when placing a trade, or can I just limit it to say $1000? Thank you in advance.

P.S. I know I am asking stupid questions and liekly will receive a good scolding, so please if you would like to do so, please Pm me so I can aitomatically send the messahes to trash. Thank you.
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Quote from Beebers:

You can open a position and close it during the same day 3 times only in a 2 month period or so - otherwise you will violate the Pattern Daytrader rule.
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???????

it's 3 times in 5 days, not 2 months.
 
Thank you for the replies everyone! Yes the minmum for margin in $2000 at my broker (optionshouse). So basically I would be able to trade 3 times a week just with this $2000 in equity without requesting additional margin? Thank you!
 
Ah, got that wrong. Thanks.

Once caught though, the close you down for quite some time, right?

Quote from IronFist:

???????

it's 3 times in 5 days, not 2 months.
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