Lying to Brokers to open accounts

[oolarinm]

A day trade is buying and selling the SAME stock on the SAME day.

now if you can do this four times in any rolling five day period ,All you have to do is use different stocks if you can.

For example if you can daytrade IBM four times then move on to GE or something else , i think you will be okay . This of course only applies if your broker doesn't already see you as a pattern trader. ( you will only have 2:1 margin and having to be bothered like this is pain if you are new , but i think it is doable. ) .


The above is what i think the rule means . Please confirm with your broker as i have not had to try this myself

 

[tuna]

Oolarinm,thats not correct ......4 daytrades in 5 trading days makes you pdt.
To stay within the rules you may only make 3 daytrades in 5 trading days.Any buy/sell on the same day is 1 daytrade.

Note "trading days" (weekends and holidays don't count )

There's extensive discussion been had on the board if you search the archives ok

 

[oolarinm]

Tuna ,

why is that not correct , if a daytrade is defined as buying and selling the same stock on the same day . I thought that the key word here is the SAME stock ? so if i opened and closed BRCM on the same day that will be one daytrade in that stock but not count towards a daytrade in INTC ( my understanding :- if i have less than 25k in my account , every stock has a maximum of 3 trades in a week for me , so all i will do is just switch stocks. ) if you think i am wrong , show me the rule that says that can't be done according to the definition of a daytrade.

 

[oolarinm]

Tuna ,

i also meant 4 daytrades in 4 business days and not 5

 

[Optrader]

Below are the relevant NASD rules (hope they help):

(f)(8)(B) Day Trading

(i) The term “day trading” means the purchasing and selling or the selling and purchasing of the same security on the same day in a margin account except for:

a. a long security position held overnight and sold the next day prior to any new purchase of the same security, or

b. a short security position held overnight and purchased the next day prior to any new sale of the same security.

(ii) The term “pattern day trader” means any customer who executes four or more day trades within five business days. However, if the number of day trades is 6% or less of total trades for the five business day period, the customer will not be considered a pattern day trader and the special requirements under paragraph (f)(8)(B)(iv) of this Rule will not apply. In the event that the organization at which a customer seeks to open an account or to resume day trading knows or has a reasonable basis to believe that the customer will engage in pattern day trading, then the special requirements under paragraph (f)(8)(B)(iv) of this Rule will apply.

 

[tuna]

Oolarinm i hear what your saying and can see your argument, but unfortunatly its not the way that its being interpreted ....
Buy Brcm// sell Brcm---same stock yes....same day yes
buy Intc // sell Intc----same stock yes....same day yes

That is the way as far as i know that the firms are dealing with it....If anyones got differant please let me know ....

Big Daddy spoke and the firms are still touching their toes taking it up the #@%6^ losing business....I would have thought more fight was had but thats just my thoughts and i was wrong...

 

[Trader5287]

I was only vaguely familiar with the rule when I first got patterned in early October. I'd been trading anthrax stocks all day. So the brokerage called my office, couldn't get me, then called my wife at home and freaked her out. They said the rule, then in effect for just a few days, was killing them. They wanted me to open up under a new name or joint account or something. I told them that in my former profession - legal and real estate - nothing that threatened profits like that could possibly have been enacted and that it would have been killed instantly. They said they had no industry clout to stop the NASD or whatever that enacted it. I was stunned by that comment and still wonder if it's true. I think there were a ton of sub 25k accounts out there and a ton of casual daytraders at it just to break up the monotony of work and losing those has to hurt the whole online trading industry. I don't understand how they just rolled over.

Geo.

 

[oolarinm]

fortunately i don't have the luxury of daytrading with a sub 25k account , but if i did i will trade it like i described and wait for my broker to refute it and then there will be trouble.