I just got this email from IB

[def]

Originally posted by stock777
I notice IB likes to cut and paste programming 'like' code as a form of explanation.

Better to use plain english. And as the Queen might say, WTF is this all about ?????????

first, the queen wouldn't say WTF. She's the queen. maybe bloody something or other.

second, probably was taken directly from the SEC directive word for word.

third, derekas may be on to something. i'm speculating though as I just rec'd the notice like the rest of you.

from what I read... your ability to place a trade will depend on the equity value of your account from the previous days close as opposed to the current day. i.e. say you start with 20K and buy some stock that makes 4K. You then sell. You would now think you have 4K to play with - sounds like you won't have that 4K till T+3.

 

[aphexcoil]

I'm sure there are more directives coming straight out of their directive churning machine.

The next thing you know, they'll be telling you when you can trade and what days you can be short and long.

Mondays, Wednesdays and Fridays will be LONG days
Tuesdays and Thursdays will be SHORT days

There is just no end to their bullshit laws.

 

[NKNY]

You know, I don't want to get into it but this topic... really gets me going...

Here we are, swimming in capitalism, free markets, trade agreements... blah blah blah .....And you got these SEC prick...
big brother types telling you you cant daytrade more then three times a week if your a little guy. The concept just pisses me off.

Democracy ? Sounds more like socialism to me....

Nick

Originally posted by aphexcoil

These fucking SEC rules are getting way out of hand. They need to stop regulating so much and start focusing on other things like corporate fraud, accounting errors, etc.

 

[Gordon Gekko]

Originally posted by NKNY
You know, I don't want to get into it but this topic... really gets me going...

Here we are, swimming in capitalism, free markets, trade agreements... blah blah blah .....And you got these SEC prick...
big brother types telling you you cant daytrade more then three times a week if your a little guy. The concept just pisses me off.

Democracy ? Sounds more like socialism to me....

Nick

imo, either make a rule that applies to everyone, or don't make it at all. does anyone have a link to anything that states exactly why the sec has made these rules?

 

[alanm]

The way I read it, they're capping your buying power based on the previous night's equity, not letting you make use of today's trading profits today. This reinstates a restriction that existed before the PDT rule change.

For example:

I have $50K cash as of last night's statement. I make $20K in my first trade today. Even though my account now says $70K cash, I'm limited to positions that I can take for $50K (i.e. $200K for 4:1 margin).

def: I think you mean T+1 - it doesn't mention that it's based on settled transactions. That is, you have today's trading profits reflected in your statement tonight, and available tomorrow.

 

[version77]

Better be T+1. Imagine the mess T+3 would create. In Ib's letter
they do state "Prior night's Equity with Margin Value >= Account's Total Initial Margin Requirement". And I copied and pasted this right out of their email. So there... It has to be T+1.

 

[stock777]

Well, if all this amounts to is you can't use fresh PROFITS the next day, then its no big deal. Let's hope so.

I never make any profit anyhow.

 

[Madison]

Originally posted by Gordon Gekko

does anyone have a link to anything that states exactly why the sec has made these rules?

I haven't figured it out either - but there is no doubt that in some way they're net beneficial to the brokerage/banking lobby and to the government.

 

[echo]

If you could use the days profits to purchase more stock, wouldn't you essentially be using interest free (and increased) margin? Since the brokerage firm won't actually get the cash for your profits for three days, you would be borrowing money based on money you will get in the future. Capping this doesn't seem unreasonable. Then again, maybe I am misreading this whole topic.

 

[mskl]

I know it sounds like T+1 but that doesn't make much sense.

For example - what if you had $50,000 cash as of last night and you LOST $20,000 trading today - there is no way you should still be able to trade with the previous nights Equity with Loan Value ($50,000)