floating a trial balloon concerning pdtr regulation

PDT Rule does affect the Market, think of if this way.

The PDT Rule Took people OUT OF THE MARKET, they could not TRADE anymore. When you do that you affect the market.

Other than that, the rest of your post I 100% agree with.

The PDT Rule is SILLY and can not be explained by anybody that is rational.
 
Hey, I don't post much therefore I don't qualify for Senior Member, even though I am an avid READER of Elite Trader, its just NOT FAIR!

There should be a Senior Lurker title.
 
I was idly skimming through a trading book called "Electronic Daytrading to Win" when I came upon some history that readers of this thread might find rather interesting. It's kind of a long passage so I've edited it down as much as possible.

"In September 1988 to cripple this new and growing industry the NASD again adopted new rules for approval of the SEC... This time the market makers sought to exert their influence to expand the definition of "professional trader" to include ANY account in which five or more "daytrades" had been executed through SOES .... or where a "professional trading pattern" in SOES was exhibited...

By late 1991 the NASD was met with a backlash of opposition from the growing SOES community regarding SEC approval of the "professional trader" rule. SOES activists argued that the NASD was erecting a protective barrier in favor of market makers and thus restricting competitive forces... in other words market makers would again be able to protect themselves from fair competition by excluding one class of trader...

The SOES trading community also appealed the SEC's approval of other aspects of these rules to the U.S. Court of Appeals for the District of Columbia Circuit, which remanded the matter to the SEC in 1993 to consider, among other things, whether the professional trading account rules were unacceptably vague, thereby allowing the NASD to enforce the "professional trader" rule in an arbitrary and capricious manner favoring market makers.

Thankfully the decision was rendered in favor of the SOES community and so marked a turning point in the SOES industry. In October 1993 the NASD repealed the "professional trading account" rules. In addition the NASD withdrew the definition of "daytrade" and "daytrading." In so doing, one more step was taken toward the achievement and maintenance of a free and open market."

Times change of course, but still its nice to know that daytraders have taken on the mighty SEC and NASD in the past - and won. At any rate, for anyone pondering some kind of action there's some helpful ideas in there...
 
Thanks for giving us some history. Time for them to repeal and withdraw again!!! Or wait for huge fine and compenstation. Wait and see, pal.

:p


Quote from Proudrebel:

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In October 1993 the NASD repealed the "professional trading account" rules. In addition the NASD withdrew the definition of "daytrade" and "daytrading." In so doing, one more step was taken toward the achievement and maintenance of a free and open market."

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Quote from metooxx:

Exactly who are you going to collect damages from in a class action suit?
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While I am very much against the PDT rules.....

How about this scenario......
This goes to trial and when it comes time for damages the counsel for the SEC shows stats that prove 90+% of daytraders with less than 25K in their account lose money. Thus the rule in effect has saved the plaintiffs money and has cost brokers dearly (large losses in forgone commissions). The judge/jury ponder this information and come back with an award of minus 25K. :D
 
Quote from def:

This goes to trial and when it comes time for damages the counsel for the SEC shows stats that prove 90+% of daytraders with less than 25K in their account lose money.
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Then counsel for the Plaintiff counters by presenting statistics showing that 90+% of traders with more than 25K in their accounts lose money, especially in the last 15 months since this rule went into effect. And that those traders with more than 25K who lose, lose far more than what the under 25K traders lose. Not only because they have more money on the line to lose in the first place, but because the increased 4:1 margin they are given access to when they're over 25K tempts them to take on extra leverage, which turns against them twice as fiercely when they miscall the market.

The judge ponders this information, then goes back to his/her chambers and ponders the political favors that got him/her his/her position on the bench, and returns a ruling in favor of the S.E.C., whether it's justified by logic or not.
 
Are we going to stop talking and start doing something about it?
It's probably going to end up here without any action.:(
 
My theory is that the more participants in Trading the better for the overall market (lets face it, under current rules you just cannot trade with an account under 25K).

In the old days mid 90s, I made money with a 3k account, I messed up, holding positions, and staying in too long (swing trading).

But lets make sure they don't repeal four to one, thats the good part. You might have a 2 to one requirement below 25k, that would be a concession, but let anybody with 2500 cash trade as much as they want with 2 to 1 margin.

Is there Someone here on the inside of the Executive Branch

Ideally you need an economic advisor in the Republican Administration that would listen.
 
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