New Daytrading rule in September 01'

The best solution would be something like this and it would satisfy most of the conflicting parties:

a)Minimum account requirement for daytrading on margin should not be a prohibitive $25,000 but a more reasonable $10,000
b) 2:1 margin for accounts between $10k and $25k
c) 4:1 margin for accounts above $25k

As far as the new regulations are concerned, I feel kinda guilty that I am benefitting with 4:1 margin at the expense of the newbies, who are knocked out of the game cos they don't have $25k capital (several years ago, I started with considerably less than $25k and can these days make at least $2k on a good day ... if I was starting out as a newbie this September, the new SEC rule would have prevented me from becoming wealthy).

But I tell ya something, the people running the SEC will have a deathwish if they do a U-turn on the 4:1 margin. This 4:1 margin is absolutely incredible and will give me so much more flexibility to make even more money, so the SEC bastids better keep it.

 
def,
You were right -- I was interested in seeing IB's response. I will post a link to it on a http://www.clearstation.com board. Did not know you had already posted a link to Datek's response -- either it was on another thread at this site or I missed it when reading this thread.

I have not seen any letters or internet messages in favor of the new SEC rules; however, I have read only a few of the letters submitted to the SEC. All messages I have read at clearstation have been against these rules -- even so, some end on an "Oh well" note.

Someone (in a message at clearstation, I think) suggested that the new SEC rules are intented by traditional brokerages, such as GS, etc, to reduce competition from online brokers like IB, Datek, etc. I have wondered about this myself. Seems it could be at least part of the explanation.

One person stated that he is surprised that there has been so little discussion about the new rules, and I am surprised, too. Even though the rules are a "done deal," I expected more outcry as many traders are only now becoming aware of them. It still could happen (although it doesn't seem likely) -- I have an account at Ameritrade and they have not said a word yet (no alert or anything). I called and insisted on talking with a supervisor after getting no information from a front-line rep. Apparently, Ameritrade is not ready to say anything about how it will interpret and implement the rules. I did not attempt to go higher in the management chain.

fast




 
fast,

Although the new rules are a done deal, there is always the potential for a subsequent revision of them. Brokers (of all ilks) will be up in arms about these regulations because a large % of their active traders will not have $25k in their accounts, thereby diminishing the commission revenue base in the industry. One would suspect that the conventional brokers would be hit harder than the direct access brokers, whose clients are probably better capitalised (for the simple reason that direct access brokers have usually required around $10k to open an account and conventional brokers may have required as little as $2k to open an account). So the net result is (perversely) that daytraders will be relatively unaffected, and the active traders of conventional brokers such as ETrade will bear the brunt of the new regulations.
 
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