Originally posted by StockApprentice
I was just wondering how many of us lied to our brokers in order to open our trading accounts and or to receive enhanced account features. Any comments?
My personal thought on this is that some brokers seem to require a large amount of income, experience, etc.
Are you saying that the firms don't make any control on your
income ?
I am looking for a direct access broker, but they
always ask for a $35000 income + $50000-60000 cash that
I don't own: there will not be problems lying on the real
patrimonial situation then ?
Thanks in advance.
Lying to Brokers to open accounts
- Thread starter StockApprentice
- Start date
Originally posted by Alechin
Are you saying that the firms don't make any control on your
income ?
I am looking for a direct access broker, but they
always ask for a $35000 income + $50000-60000 cash that
I don't own: there will not be problems lying on the real
patrimonial situation then ?
Thanks in advance.
Alechin,
I'm not sure exactly what your question is. However, I have a lot of doubt about whether brokers do the research that is required to verify that any of their members annual income. It also seem that the requirement really has only one purpose: to keep their butts out of hot water should we lose our shirts trading. It also makes sense that they would want to accept members rather than turn them away because of their need for commissions, especially now after the "internet boom" dramatically increased the number of clients that brokers had vs. what they now have.
I have been looking for a good direct access broker myself. I started a year ago and was very discouraged that the minimum deposits were so high 50k+, but now many direct access brokers will only ask for a 25k, 10k, 5k, or 2k deposit. If you need a little help finding some of these firms contact me, or just ask the other traders around here
Originally posted by StockApprentice
Alechin,
I'm not sure exactly what your question is. However, I have a lot of doubt about whether brokers do the research that is required to verify that any of their members annual income. It also seem that the requirement really has only one purpose: to keep their butts out of hot water should we lose our shirts trading. It also makes sense that they would want to accept members rather than turn them away because of their need for commissions, especially now after the "internet boom" dramatically increased the number of clients that brokers had vs. what they now have.
I have been looking for a good direct access broker myself. I started a year ago and was very discouraged that the minimum deposits were so high 50k+, but now many direct access brokers will only ask for a 25k, 10k, 5k, or 2k deposit. If you need a little help finding some of these firms contact me, or just ask the other traders around here
Actually there are none that will accept a daytrading account for under $25,000 now. That is the new rule the SEC has.
Thank you rtharp. I am well aware of the SEC's new rule. However, I didn't say that they were daytrading accounts... I said that they were accounts with direct access brokerages.
Also, if you read the rule carefully you will notice that you are considered a "daytrader" if you make 4 or more executions per day for 4 Consecutive days. One could always work only 4 days at a time and then take a days vacation...
Very informative.... why don't you give me a link or something because all of the sources that I've seen tell me that this can be done.
One of my sources: datek my broker. Here is what they have to say:
"A pattern day trader is defined as an account that makes 4 round-trip day trades (opening and closing a position in one day) in any rolling 5 business day period. Pattern day traders are subject to day trading rules and requirements. "
Check out these sites:
http://www.tradesweeper.com/updates/penson/Penson New Daytrading Rules.htm
http://www.alert-trading.com/marginrules.htm
http://www.invest.com/daytrade.htm
http://www.thestreet.com/markets/taleofthetape/1524730.html
If you want more sites I am sure that I can find them. I can't seem to find a statement on the SECs website though...
Picky, picky. so it's four "round trip trades" instead of executions. Either way, my point is still intact: If you only "daytrade" for 4 business days at a time (consecutively) then you are not considered a "pattern daytrader."
"...Also, if you read the rule carefully you will notice that you are considered a "daytrader" if you make 4 or more executions per day for 4 Consecutive days. One could always work only 4 days at a time and then take a days vacation... "
Stock
You are considered a PDT if you make 4 or more executions within any 'rolling' 5 day period. Not "4 or more executions per day". You can only show a maximum of 3 daytrades within any 5 day period. If you make one trade on Monday then it will be the following Monday before you can use that trade again.
Stock
You are considered a PDT if you make 4 or more executions within any 'rolling' 5 day period. Not "4 or more executions per day". You can only show a maximum of 3 daytrades within any 5 day period. If you make one trade on Monday then it will be the following Monday before you can use that trade again.
Where did you get this information? I haven't read anything like that anywhere that I've looked.