pattern daytrade rule discrimination ???

[ddunbar]

Bit, you're being foolish.

I'm surprised because generally, you're level headed. And you make some good posts.

Anyway, you don't see the arbitrary threshold you're clamouring over while claiming it's a denial of rights.

A seemingly arbitrary threshold such as $25,000 for a specific style of trading is equally as arbitrary as Regulation T's 50% margin rule, no? Or is it? There has to be a valid rationale behind it. Right? Of course there is. Read up on the reasoning behind the PDT rule. And the evidence they used in determining the $25,000 threshold.

This issue has absolulely nothing to do with freedom or discrimination. That's patently absurd. It's a rule of participation for a specific type of trading style. That's it. It's no different than a rule which sets a seemingly arbitrary age for drinking, voting, driving, etc.

And it's no different than when REG-T went into effect raising the margin requirement to 50%. And yes, many small traders were irate back then too. But they belonged to a group who was losing the most money but more importantly, couldn't afford to lose it. Much like those with accounts less than the arbitrary $25,000 who engaged in daytrading prior to the rule's enactment.

*shrug*

 

[Bitstream]

Quote from ddunbar:

Bit, you're being foolish.

I'm surprised because generally, you're level headed. And you make some good posts.

Anyway, you don't see the arbitrary threshold you're clamouring over while claiming it's a denial of rights.

An arbitrary threshold such as $25,000 for a specific style of trading is equally as arbitrary as Regulation T's 50% margin rule, no?

This issue has absolulely nothing to do with freedom or discrmination. That's patently absurd. It's a rule of participation for a specific type of trading style. That's it. It's no different than a rule which sets a seemingly arbitrary age for drinking, voting, driving, etc.

And it's no different than when REG-T went into effect raising the margin requirement to 50%. And yes, many small traders were irate back then too. But they belonged to a group who was losing the most money but more importantly, couldn't afford to lose it. Much like those with accounts less than the arbitrary $25,000 who engaged in daytrading prior to the rule's enactment.

*shrug*

50% margins t-reg has been introduced for good reasons, meaning making sure traders have enough money in their acct to survive a large hit and cover overnite losses without leaving brokers exposed to covering those losses themselves and having to pursue legal action to recover them. the difference is fundamental and has nothing to do with losses because by holding overnite, that is encouraged by the pdt, the trader increases the risks of large losses exponentially. the pdt was introduced theoretically to protect investors not the exchange or brokers...it does no matter if the group was losing money, its THEIR money...and i gave u other examples where small acct holders would benefit from having access to stock trading intraday, this is what u dont understand. futures dont fall under pdt and are more dangerous than stocks, the rule is preposterous if u take that into account. there's no argument to make here...of course, if u want to keep blabbering carry on.

 

[Pa(b)st Prime]

Bit, I believe the catalyst behind the rule was the exchanges. The NASDAQ in particular. With the move to decimalization it made little sense for MM's to tie up human resources, bandwidth and capital all for the sake of a penny edge on 100 shares.

Not to mention customer lawsuits. Broke traders like to sue. 25k is just an arbitrary number.

Quote from Bitstream:

50% margins t-reg has been introduced for good reasons, meaning making sure traders have enough money in their acct to survive a large hit and cover overnite losses without leaving brokers exposed to covering those losses themselves and having to pursue legal action to recover them. the difference is fundamental and has nothing to do with losses because by holding overnite, that is encouraged by the pdt, the trader increases the risks of large losses exponentially. the pdt was introduced theoretically to protect investors not the exchange or brokers...it does no matter if the group was losing money, its THEIR money...and i gave u other examples where small acct holders would benefit from having access to stock trading intraday, this is what u dont understand. futures dont fall under pdt and are more dangerous than stocks, the rule is preposterous if u take that into account. there's no argument to make here...of course, if u want to keep blabbering carry on.

 

[walter4]

Uhm.. Why is $25k such a big deal? I mean, why is it that you can't get the money?

The best economy on the planet, thousands of job listing- it is beyond me that a living breathing human being can't save $25k these days!

Thank god you people don't live outside US, you wouldn't last a month.

 

[ddunbar]

Quote from Bitstream:

50% margins t-reg has been introduced for good reasons, meaning making sure traders have enough money in their acct to survive a large hit and cover overnite losses without leaving brokers exposed to covering those losses themselves and having to pursue legal action to recover them. the difference is fundamental and has nothing to do with losses because by holding overnite, that is encouraged by the pdt, the trader increases the risks of large losses exponentially. the pdt was introduced theoretically to protect investors not the exchange or brokers...it does no matter if the group was losing money, its THEIR money...and i gave u other examples where small acct holders would benefit from having access to stock trading intraday, this is what u dont understand. futures dont fall under pdt and are more dangerous than stocks, the rule is preposterous if u take that into account. there's no argument to make here...of course, if u want to keep blabbering carry on.

1. It was you who said there was a PDT in futures. Perhaps it was a typo on your part. Of course I know there isn't, that's why I asked you to cite the PDT for futures as a cue to let you know you're wrong.

2. You proclaim that 50% margin is a good thing. Essentially to protect traders from... well... losses. It's a rule that protects both overleverages clients and somewhat protects brokerages against overleveraged clients. However, brokers have always had a system to protect themselves from negative equity situations. It called liquidation. So REG-T was ultimately a protection for the public.

3. Yet at the same time you admit the PDT was enacted to protect the general public from loses. Holding overnight does not exponentially increase risk. That's a perspective of a daytrader. There's no impetus that dictates that one must trade in and out the same day - which would trigger the PDT rule. One could capitalize on a move in one stock that one day or 3 days. And do well.

So what's the fundamental difference? Both rules were enacted on the grounds of protection.

Hey, there's a rule that a margin account can only be opened with a minimum of $2000. Is that an infingement of freedom?

You ultimately have no case. You're technically blabbering without any foundation. And perhaps speaking from some near anarchist's perspective. We live in a world full of arbitrary thresholds. But the spirit of those thresholds is protection. Get over it. It's not infringement on any freedom. With liberty comes responsibility. Unfortunately not everyone is responsible. So we need laws and rules which attempt to keep the generally irresponsible from self-destruction which in turn affects society at large. People were taking out home equity loans to day trade. Quiting their jobs with dreams of being SOES bandits. Among other irresponsible and unthinking things. The spirit of the rule is good. It's not perfect as no law or rule is.

LOL @ blabbering.

In a decade or less the rule will be revisted and perhaps the threshold will be increased to account for inflation since the rule was enacted.

Repealed? highly doubtful given that technology has lowered the barrier to entry and in some respects leveled the playing field between pro and novice. The only difference is, the pro actually knows how to capitalize on the technological change.

The only case you have, if you can call this a case, is that you think the law is unfair. I think having to pay for insurance is unfair but I get the need for the protection it provides the gernal public even though I've never been in a car accident while behind the wheel. I think the drinking age of 21 is unfair if you can go to war and vote. But again, I understand the spirit of protection it attempts to address.

*shrug*

Anyway, whatever. A minority's bleating over the issue going to have near ZERO effect on the rule. It's here to stay thanks to the mentaility and actions of those with the same irresponible attitudes as those who think the law unconstitutaional and unfair.

Score some loot tomorrow and in the days ahead. Here's wishing you profitability.

 

[stock_trad3r]

To be safe have a 100K account and only use half for trading

 

[Bitstream]

futures dont fall into pdt stocks do, that's all u need to know to realize how stupid the regulation is. everything u just said falls apart when u look at this issue. all this protection crap u talk about is utter nonsense if it discretely applies to a privileged instrument only. i see u conveniently avoid this issue like pest and i can understand why.


eidt; i didnt make any typo. i said pdt dont apply to futs.

Quote from ddunbar:

1. It was you who said there was a PDT in futures. Perhaps it was a typo on your part. Of course I know there isn't, that's why I asked you to cite the PDT for futures as a cue to let you know you're wrong.

2. You proclaim that 50% margin is a good thing. Essentially to protect traders from... well... losses. It's a rule that protects both overleverages clients and somewhat protects brokerages against overleveraged clients. However, brokers have always had a system to protect themselves from negative equity situations. It called liquidation. So REG-T was ultimately a protection for the public.

3. Yet at the same time you admit the PDT was enacted to protect the general public from loses. Holding overnight does not exponentially increase risk. That's a perspective of a daytrader. There's no impetus that dictates that one must trade in and out the same day - which would trigger the PDT rule. One could capitalize on a move in one stock that one day or 3 days. And do well.

So what's the fundamental difference? Both rules were enacted on the grounds of protection.

Hey, there's a rule that a margin account can only be opened with a minimum of $2000. Is that an infingement of freedom?

You ultimately have no case. You're technically blabbering without any foundation. And perhaps speaking from some near anarchist's perspective. We live in a world full of arbitrary thresholds. But the spirit of those thresholds is protection. Get over it. It's not infringement on any freedom. With liberty comes responsibility. Unfortunately not everyone is responsible. So we need laws and rules which attempt to keep the generally irresponsible from self-destruction which in turn affects society at large. People were taking out home equity loans to day trade. Quiting their jobs with dreams of being SOES bandits. Among other irresponsible and unthinking things. The spirit of the rule is good. It's not perfect as no law or rule is.

LOL @ blabbering.

In a decade or less the rule will be revisted and perhaps the threshold will be increased to account for inflation since the rule was enacted.

Repealed? highly doubtful given that technology has lowered the barrier to entry and in some respects leveled the playing field between pro and novice. The only difference is, the pro actually knows how to capitalize on the technological change.

The only case you have, if you can call this a case, is that you think the law is unfair. I think having to pay for insurance is unfair but I get the need for the protection it provides the gernal public even though I've never been in a car accident while behind the wheel. I think the drinking age of 21 is unfair if you can go to war and vote. But again, I understand the spirit of protection it attempts to address.

*shrug*

Anyway, whatever. A minority's bleating over the issue going to have near ZERO effect on the rule. It's here to stay thanks to the mentaility and actions of those with the same irresponible attitudes as those who think the law unconstitutaional and unfair.

Score some loot tomorrow and in the days ahead. Here's wishing you profitability.

 

[vinigar]

I have always had the suspicion that during the market crash of 2000, that they needed a scape goat to blame for all of the market woes at the time. Whenever, there is trouble, they turn and point the finger at the daytraders. Thinking that their over excessive trading and recklessness was the root cause for the markets downfall. Turns out we all know the ENRON's of the world and corporate mismanagement along with falsification was the real factors. In the meantime, the Daytraders took the blame....hence 'Pattern Day trading". Will they bone up? Admit they were wrong? Change things so that it is fair for all? Not on your life

 

[z32000]

come on now... i can't believe you're falling for this...
The "government" cares about you... that's very funny

So you really think the government cares about individuals gambling their money away? ...that's the most ridiculous thing i ever heard...
if the government cared, they would have the same PDT regulations on Futures, Options and Casinos... imagine walking into a casino with a sign that read.. you must show us proof that you have $25k before you can begin gamble... "we care about you"...

i can see why paying for car insurance or not being able to drive till a certain age is manadatory..."incase you harm someone else who is not at fault, then it would be unfair for them to be unprotected." When was it ever required to get comprehensive insurance?

You have to realize, EVERYTHING is wrapped around "the stock." The government is basically saying, you can mess around with "derivatives" but don't you dare play with the underlying stock. People's retirements/life savings are on the line.

Basically, here is my point... it's just another way to keep the rules in order so the Rich get richer and the poor get poorer.

If daytraders fiddled with the underlying stock, the entire market can become much more volitle and so the "little guys" can bring the market down and bring even more uncertainty to the market (at least after daytrading has caught on). The Fed wouldn't know whether to lower or increase interest rates...

Then you probably would say... as if there will be day when more people will see the benefits of day trading...

I think it's probably big business telling everyone to "diversify and go long term investing" since they have you believe that 90% of daytrader lose their money when the truth really is...

For every winner, there is a looser...and for every looser there is a winner... If you have a friend that is losing A LOT of money Daytrading... all you have to do is do exactly everything OPPOSITE and you be gaining money A LOT of money. It "can be" almost a 50/50 percent chance (since fees are taken into an account)

With the PDT rule, it was inforced to make the market more predictable...again, nobody wants the little guy to scare off and bring uncertainty to the bigger fellow's porfolios.

Which is why, the rich get richer and the poor get poorer...

Why has the government put in rules to make sure citizens don't buy a house in the middle when the housing market is falling.... mortages is probably the biggest leverage for a lot of families...
is the government willing to protect me, if I purchase a house right now worth $300,000 which goes down to $200,000 next year?

oh wait, yeah that's right... the PDT rule was put in place cause the government want's to make sure we have at least $25,000 first...

Firstly, stocks are a lot less risker then their derivatives... how often do you hear a stock go from $30 to 0? with dervatives, you can not only loss you entire investment average day in the market without much volitility, but you can even owe some....

So for all you that think there is nothing wrong with the PDT rule, I may be a whiner... but you guys are "suckerrrrs"

 

[ddunbar]

Yeah Bit, you did state that PDT applies to futures. I gave you the benefit of the doubt that it was a typo. But truth is, you can't congeal your thoughts on the matter. Suggests you're affected by the rule.

03-19-07 08:57 PM

established fact??? lol. how on earth do u establish who's the dumb money and who's not. is that because the sec has said that small acct holders are incapable of any thinking? this is even more ridiculous and total nonsense if u think that pdt dont apply to futs. the most unforgiving mkt of them all for noobs.