pattern daytrade rule discrimination ???

Quote from 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"
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Z, if you read your own post over you'll see that you're saying the same thing.

A few points though:

1. No one is saying the gov't cares, per se. Protectionist legislation doesn't necessarily work in that manner. But you got the point that they're trying to protect the public at large on economic and social grounds. There are dividends to be reaped for doing such. One thing the Gov't needed to dispell, and which you alluded to, is the notion that the stock market is an arcade or casino. I don't think I need ot go into why that's important. You seem bright enough to figure it out. Hint: pension, mutual funds, etc.

2. Is there anything wrong with the PDT? Sure, it's arbitrary. Much like drinking age law is especially when compared against the age of consent, voting age, driving age, and military service age limit. But because a significant number of greedy idiots were losing their shirts, quiting their jobs, and causing financial hardships for their families, the gov't decided not to let that become an epidemic. FACT is, when people think to trade, they predominately think to trade stocks. Not options, futures, forex, etc. Stocks are on the brains of most Americans. Most Americans don't even know what a future or commodity is. Do a "J-walk" and ask around if you don't believe me. Derivatives attract more studious individuals. Not always though. But the stigma of high risk acts as a deterent for these markets.

In the end, you're not whining. Whining is a function of ignorance. Critical discourse is a function of understanding. And you seem to understand the issue.
 
Quote from stylark3:


They have no right to tell an individual how often they can trade
their own money.
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Absolutely. But they do have the right to tell you how you can trade with other people's money, and that's what you're doing with a margin account.

A lot of people think the PDT rule is to protect investors. That's not the case, or is true only indirectly. It's to protect the people who loan you the money. If you look at the actual rule, http://www.nasd.com/web/groups/rules_regs/documents/notice_to_members/nasdw_003881.pdf you'll see a page full of background info where they talk about how day traders put the broker and clearing firms at risk. Then:
The minimum equity requirement addresses the additional risks inherent in leveraged day trading activities
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You can legitimately argue that a person with $25K in his account can lose even more money for the clearing firm than a person with only $10K because he could be betting $100K on a stock that swoons intraday.

The main thing I find wrong with the PDT rule is that it discriminates against people who don't even use margin. If you use a cash account, or trade only long options (which aren't marginable), the PDT rule still applies, though there's little risk to the broker.

[I think the real reason for the PDT rule is that brokers don't get any margin interest from daytraders who are flat at the end of the day, yet they're taking on some risk that the trader will blow out the account and walk away without covering. $25K minimum means they get to hold some money and give little or no interest on it to you. That's why the rule addresses only daytrading, not just active trading.]
 
Whats next telling us that your not allowed in a Casino with less then $500 ????

This rule is completely against every right we value.
 
Money is a tool...just like a chart or a spreadsheet...


Once when I was in Junior College (I did not finish) during the summer, I worked for a contractor who was an Iron Worker. He hired me as a laborer...I had to buy a belt with a metal hook in it...cause OSHA required it. When we were up high on the buildings we had to tie off...some of us did and some of us didn't...but we had to have the belt!
 
Quote from Joab:

Whats next telling us that your not allowed in a Casino with less then $500 ????

This rule is completely against every right we value.
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They do have minimums and maximums at each table. Bad analogy.
 
Quote from HolyGrail:

They do have minimums and maximums at each table. Bad analogy.
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LOL

Stupid argument !

The min and max are based upon location of the game NOT the players bankroll.

If I have $500 and I decide to make a single bet on a $500 min table that's still my choice and right.
 
"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)"

only true in the zero sum markets (futures, options, etc.) NOT the stock market

it is absolutely false that for every winner there is a loser. the stock market is not zero sum and has steadily (with some major hiccups along the way ) :) built wealth over time

if you don't understand this, then you don;'t understand the structure of the stock market (or any other non-zero sum market ) to understand that you can have MORE net losses than gains or more net gains than losses in the stock market. that's cause it's not zero sum. the sum varies. as long as capitalism/our economy keep creating wealth, the longterm trend of the market will remain up

btw, there has never been a 20 yr period in the history of the stock market where dollar cost averaging into the market on a monthly basis, would not have given positive gains, and in the vast majority of those rolling 20 yr period, quite good gains
 
Quote from 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.
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u cant read, i guess...

i wanna see how many people here can back you on this.

"this is total nonsense if u think the pdt dont apply to futs".
 
Quote from Joab:

LOL

Stupid argument !

The min and max are based upon location of the game NOT the players bankroll.

If I have $500 and I decide to make a single bet on a $500 min table that's still my choice and right.
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Not really. The minimums are set by the house. In this case the house is the government.

In any event we are talking about margin. Margin is borrowed money and is not YOURS.

A casino does not have to loan you money because they loaned someone else money.
 
if you don't understand this, then you don;'t understand the structure of the stock market (or any other non-zero sum market ) to understand that you can have MORE net losses than gains or more net gains than losses in the stock market. that's cause it's not zero sum. the sum varies. as long as capitalism/our economy keep creating wealth, the longterm trend of the market will remain up
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please explain...

From my understanding, it is a zero sum game (exclusing commission/spread). For example, those that lost money in the dot com bust, the money just doesn't disappear into outter space... the money went to those that purchased the stock on the up hill.
Here is an example of the discussion

http://www.dklevine.com/workshops/discuss.php3?showID=140

I think the education system believe's it is. For every winner, there is a loser and for every loser there is a winner. It's not possible to have only winners in the stock market without the same amount of losers.
Anyone have an insight on this?
 
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