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Remove the Pattern Day Trading Rulle - Vote
- Thread starter Joab
- Start date
PDT rule is annoying but whatever.
Wash sale rule is annoying and is the reason i opened a futures account.
Trading SPY multiple times a day... make a loss... now you cant trade it for 30 days without making your taxes annoying to do. F that.
Actually, having to list multiple round trips per day EVERY DAY for the year is damn annoying, too.
Futures are better in every way except for being forced into using a lot of leverage. that sucks.
Wash sale rule is annoying and is the reason i opened a futures account.
Trading SPY multiple times a day... make a loss... now you cant trade it for 30 days without making your taxes annoying to do. F that.
Actually, having to list multiple round trips per day EVERY DAY for the year is damn annoying, too.
Futures are better in every way except for being forced into using a lot of leverage. that sucks.
Quote from YngvaiMalmsteve:
I didn't trigger the PDT. My point was I couldn't exit without triggering it. The stock had showed a trend of closing strongly and gapping up the next day. It was closing strongly so I bought it right before the close. The entire intent was a swing trade. However, there was unanticipated news after hours, and the stock ended up gapping down rather than up the next day. I couldn't get out the same day upon the news and had to eat a bigger loss the next morning.
My whole point is to show that swing trades don't act as stop losses. Because stocks can gap up or down significantly on unexpected news, a swing trade is, in some ways, inherently more risky than a day trade.
Ok that makes sense. But you have to admit that entering a trade without anticipating the possibility of triggering the PDT is bad trading. While you did follow your own trading rules, you didn't protect yourself against loss and other probable variables like news and the need to trigger the PDT as a form of stop loss (needing to exit the 3rd trade in a week.)
Anyway, I'm not defending the PDT rule. In some respects it appears a necessary evil and in others it's utter rubbish. But it's here to stay. Brokerages hate it and have petitioned congress on a number of occasions to do away with it and thus far have had no success.
I just would like to see stock traders with less then the required $25K (which in reality need at least $30K) trade other instruments which don't have these restrictions.
All the arguments against the PDT on forums go along the lines of "it's unfair, it's un-American... they did it for the market maker's sake..." with no real substance or alternative strategies. It usually looks like a "whine-fest."
I find the law's $25K threshold to be a bit arbitrary. And likely will have to be adjusted upwards for inflation in the years to come. But it is what it is and those with small accounts should look elsewhere to actively trade. Many of those instruments enjoy advantages that stocks do not like higher leverage, low taxation and in some cases, greater liquidity. Plus when you can only trade 1 or 2 instruments, you tend to specialize in them and therefore likely become a better trader.
Quote from DmanX:
Then how did you trigger the PDT? Surely you must have known that in the event that you needed to get out of the trade sooner rather than later (reg-t settlement) you would stand to trigger the PDT.
Perhaps the trade was entered prior to 3pm cst, news broke after 3, and an exit during the tradable post market between 3 and 7 would have required another day trade. Any trades entered at any time on stocks or etf's during pre, post, and regular hours count for that day when calculating day trades. Not being able to trade because one has no day trades left makes the case for how messed up the rule is. It is restrictive. There are already enough reasons not to take trades in this game, other forms of gov intervention included.
The nice thing about futures is you can get in and out at all hours, which is a nice safety net (along with the lower acct. mins). It would not be unreasonable to have similar account mins for index etf's. Even from a swing perspective, I have moved to q's, as pre and post market plays do not have the huge spreads that exist in stocks pre and post. Don't have those pesky analyst exposures, either.
trading volume would quadruple after elimination of pdt rule.
mom, pop, and joe six pack would leave the computer running an automated trading program while they were at nine to five. then come home to magical stock market profits in the evening and count their retirement blessings. at least in a bull market this would happen.
mom, pop, and joe six pack would leave the computer running an automated trading program while they were at nine to five. then come home to magical stock market profits in the evening and count their retirement blessings. at least in a bull market this would happen.
Quote from DmanX:
Do you remember the media induced public outcry back then in 2000 about daytraders and their effect on the stock market which lead to the rule enactment in 2001?
This is a great comment. Do you remember the media outcry last year about oil speculators? Or short sellers during the market crash? And recently there were a few members in congress who wanted to place a transaction tax on short term traders. Congress is influenced by the media, unfortunately. And regulation is usually kneejerk and overdone.
I believe the current congress will not do anything to aid any type of short term trading. I think they are biased against short term trading, or will be if we keep going lower. I don't expect to ever see lower PDT mins, and in fact, wouldn't be surprised to see it go the other way. I've done my share of bitching about it, but that doesn't change anything.
I agree totally with you about trading only one or two instruments. Mine are the q's and the ym. My fear is they will begin to mess with the futures regs. Futures mag has some very good articles on that this month. Too bad the majority of folks in congress don't understand the markets before they mess with them.
"I just would like to see stock traders with less then the required $25K (which in reality need at least $30K) trade other instruments which don't have these restrictions."
Well do me a favor and list them here. I found trading options on the q's and oex about the safest way to learn the game and still have fair potential for a good reward for my time. My maximum loss was predefined and the options often went up 4-500%. Trading futures and currencies seems alot riskier to me, but if you could show me I'm wrong I would appreciate it.
Well do me a favor and list them here. I found trading options on the q's and oex about the safest way to learn the game and still have fair potential for a good reward for my time. My maximum loss was predefined and the options often went up 4-500%. Trading futures and currencies seems alot riskier to me, but if you could show me I'm wrong I would appreciate it.
Quote from Klamath:
Not letting a person exit a trade for their own protection is incredibly stupid, even for the government.
This is not correct. The broker should always let you exit or close a trade no matter what. I believe this trader is mistaken. A phone call to the broker should have been made if the trade could not be made online.
The rule does not force anyone to stay in a trade.