Nusrat said in Italy there are different speed limits for different sized cars. It was an analogy to having different rules applied to different sized stock accounts.
PDT killing you? why not futures?
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Quote from Doogie Hoser:
vladiator, i think they should raise the PDT requirement to a cool half million don't you? or maybe even ONE million? Let's protect as many as we can, right? If people become better traders at 25K, imagine how much better the trader at one million.
Perhaps they should ban trading all together, it's all a ruse anyway because EMT. Right?
You read my mind
Wake up dude. You have a very rosy picture of this "democratic notion of freedom". Democracy is the "rule of people" the majority of people will benefit from the rule. That's all that matters from the democratic point of view. Again, having lived here and in the former USSR for a while, I can tell you that this country is a lot more restrictive in a number of ways. Example? You here are so freaking concerned with safety it drives me nuts. I wanna go take a high jump at the pool. Guess what? They wouldn't let me... B/c supposedly I have to have had lessons for it... In the USSR noone would give a fuck. They probably wouldn't give a fuck in the PDT case either - wanna trade and have no clue what you are doing - perfect, you go ahead. That would have been the attitude of the USSR officials...
Actually, the pool example is a very good one. That's exactly what happened with PDT - if all are allowed to jump at the pool, some would enjoy being there a lot more. Quite a few dabblers would break their necks... The concern about the latter matters more.
As to having the right to freely employ your capital - as I said before just b/c the money is yours doesn't mean you can spend it any way you like - e.g. go sponsor some criminals etc.
Again with your ridiculous analogies.
In capitalist America you have the right to spend your money. Your examples about sponsoring criminal activities are NOT restrictions on your right to spend your money: they are prohibitions on your right to support criminal activities. The prohibition is on the criminal activity, not the fact that it is your money.
And the pool analogy? What they have said is that you can jump in the pool 3 times per 5 days. Doesn't matter if you go off the highest diving board, or dip your toes in the shallow end. If you dip your toe in the shallow end three times in 5 days, you're not allowed to go back in the pool for another week. No distinction made between that or jumping off the highest diving board, both are allowed three jumps.
In capitalist America you have the right to spend your money. Your examples about sponsoring criminal activities are NOT restrictions on your right to spend your money: they are prohibitions on your right to support criminal activities. The prohibition is on the criminal activity, not the fact that it is your money.
And the pool analogy? What they have said is that you can jump in the pool 3 times per 5 days. Doesn't matter if you go off the highest diving board, or dip your toes in the shallow end. If you dip your toe in the shallow end three times in 5 days, you're not allowed to go back in the pool for another week. No distinction made between that or jumping off the highest diving board, both are allowed three jumps.
The PDT rule is one of the most ill-conceived regulations that has ever been enacted.
First of all, how they picked $25k as the minimum account equity is a mystery to me. Did they just arbitrarily pick a number out of their asses?
Second, if (and it's a big IF) the premise of the PDT rule was to "protect" so-called inexperienced investors from losses from day trading, why the f@$k did they up intraday margin leverage from 2-to-1 to 4-to-1. Just because someone has $25k in their account doesn't mean they have any more skill than someone who has $20k or $10k or $5k in their account. Now the newbie with a $25k account has twice as much ammo to shoot him/her self in the foot with. Since when has simply having $25k in your brokerage account been equivalent to knowing how to manage risk? If the idea of PDT was to protect small "naive" investors from the "wild, wild" world of day trading, wouldn't it make more sense to require aspiring day traders to pass some form of competency exam (regardless of how much money they have) rather than simply requiring them to have at least $25k in their account? If you don't have the $25k, you are no longer allowed to learn how to day trade unless you trade futures or go to a prop firm.
It is almost the same as if legislators were to say, "Well poor people cannot afford to lose what little money they have playing the lottery. Therefore we will make a new law that you may only buy lottery tickets in lots of 25,000 tickets, and these tickets are non-transferable to any other parties. That way, only those who are already rich and can afford to lose will be able to play. The poor will be protected." Maybe that analogy is overly extreme, but you get the point.
Anyway, it would not surprise me in the slightest if there are legislators right now who are eyeing futures as the next target of the PDT rule. As more and more traders start turning to the futures to circumvent the PDT rules that currently apply to stocks and stock options, the legislators will be more and more inclined to try and "protect" these "unskilled" traders from themselves. I could be wrong, but I think the only reason PDT rules have not been applied to futures trading yet is because the average joe, who might have an Ameritrade account or an E-Trade account, doesn't know what the hell futures are. This is a bit of a slippery slope argument here, but I'm just saying it wouldn't surprise me.
First of all, how they picked $25k as the minimum account equity is a mystery to me. Did they just arbitrarily pick a number out of their asses?
Second, if (and it's a big IF) the premise of the PDT rule was to "protect" so-called inexperienced investors from losses from day trading, why the f@$k did they up intraday margin leverage from 2-to-1 to 4-to-1. Just because someone has $25k in their account doesn't mean they have any more skill than someone who has $20k or $10k or $5k in their account. Now the newbie with a $25k account has twice as much ammo to shoot him/her self in the foot with. Since when has simply having $25k in your brokerage account been equivalent to knowing how to manage risk? If the idea of PDT was to protect small "naive" investors from the "wild, wild" world of day trading, wouldn't it make more sense to require aspiring day traders to pass some form of competency exam (regardless of how much money they have) rather than simply requiring them to have at least $25k in their account? If you don't have the $25k, you are no longer allowed to learn how to day trade unless you trade futures or go to a prop firm.
It is almost the same as if legislators were to say, "Well poor people cannot afford to lose what little money they have playing the lottery. Therefore we will make a new law that you may only buy lottery tickets in lots of 25,000 tickets, and these tickets are non-transferable to any other parties. That way, only those who are already rich and can afford to lose will be able to play. The poor will be protected." Maybe that analogy is overly extreme, but you get the point.
Anyway, it would not surprise me in the slightest if there are legislators right now who are eyeing futures as the next target of the PDT rule. As more and more traders start turning to the futures to circumvent the PDT rules that currently apply to stocks and stock options, the legislators will be more and more inclined to try and "protect" these "unskilled" traders from themselves. I could be wrong, but I think the only reason PDT rules have not been applied to futures trading yet is because the average joe, who might have an Ameritrade account or an E-Trade account, doesn't know what the hell futures are. This is a bit of a slippery slope argument here, but I'm just saying it wouldn't surprise me.
The recent introduction of Single Stock Futures make it increasingly likely that daytrading rules may be applied to futures sooner or later. The exchanges that trade Single Stock Futures are hybrids of Security and Commodity exchanges, the crossover of regulations from stocks to futures starting with OneChicago and NQLX is a looming possibility.
And as for these rules protecting unskilled newbies? You could be a 90 year old trader who has been trading since before these regulators were born, if you have an account with under $25,000 you're going to be restricted to three "daytrades" per 5 days.
And as for these rules protecting unskilled newbies? You could be a 90 year old trader who has been trading since before these regulators were born, if you have an account with under $25,000 you're going to be restricted to three "daytrades" per 5 days.