Remove the Pattern Day Trading Rulle - Vote

Quote from wjk:

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.
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On top of that we have academics and their efficient market theory (which has been mostly discredited but persists) undermining the notion that trading, especially short term, is both essential and in the right hands, lucrative.

As for regulation, the first thing congress will attack is the OTC derivatives market.

As for a transaction tax, it's inevitable but I don't think they will act on that now. They'll probably wait until we're out of a recession and trading volumes normalize.
 
Quote from reiehaxm:

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.
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Broker was Thinkorswim. Their software automatically rejects sell orders when you're out of day trades. And their offices were closed during the after-hours tank so there was nobody to call.
 
Quote from chrismontez:

"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.
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If you're trading OEX and Q short term, then transitioning to e-mini S&P 500 futures would be a piece of cake. Plus no greeks to worry about as futures do not have a meaningful theta (time decay). Delta is 1 for 1. Gamma and Vega aren't applicable either. No having to worry about strike price selection, time to expiration, or liquidity issues.

The same volatility you experience with the OEX index is more or less the same you will with the S&P 500 index.

Emini S&P 500 futures are the most liquid of any derivative. Globex order execution system is 2nd to none. Every point in the index is worth $50 per contract. 4 ticks to a point worth $12.50 each. Average round turn (enter/exit) commissions are about $4-$5 per contract depending on broker. Margins (amount required to trade 1 contract) are typically $500 on an intraday basis.

You've also have a range of excellent platforms to choose from to use for charting and depth of market trading.

Plus risk management is more precise since you're not dealing with delta and theta. You can literally define your risk tolerance in points, at support and resistance, etc.

In any event, intrinsically speaking, trading options carries more risk than trading futures. Yet futures carry more risk than trading stocks - unless we're talking about index futures. Stocks have difficulties that futures do not experience like an uptick rule to short, needing available inventory in order to short, sensitivity to freak or surprise company news, seasonally poor liquidity, trading halts, broker not showing the true BBO, etc.

Here's a few links to get your juices flowing:

CME (where they trade): Emini specs:

http://www.cmegroup.com/cmegroup/trading/equity-index/us-index/e-mini-sandp500.html

Globex details:

http://www.cmegroup.com/globex/introduction/

A few brokers with $500/contract intraday margin and $4-$5 RT commissions:

www.Mirusfutures.com

www.ampfutures.com

www.globalfutures.com

As for currencies, cash currency trading is riskier than currency futures trading because of the logistics of the OTC cash market and its participants. It's not risk that can't be managed, i.e. knowing when not to play (around major news releases). The other caveat to cash currency trading is that if you happen to choose a broker who is also a market maker (tell tale- charges no commission), that broker is at all times inherently trading against you. You must choose an ECN broker who simply matches orders and charges a commission. There aren't that many who do that. Interactive brokers, MB trading, etc. There are others out there but they are not for beginners.

Best wishes in your search and trading.
 
Quote from reiehaxm:

If you trade one contract and have $50,000 in your account, there is no leverage. How is it forced?

As far as the wash sale rule, just dont trade in December
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I thought we were talking about people with under $25k in their account in this thread.
 
"The same volatility you experience with the OEX index is more or less the same you will with the S&P 500 index.

Emini S&P 500 futures are the most liquid of any derivative. Globex order execution system is 2nd to none. Every point in the index is worth $50 per contract. 4 ticks to a point worth $12.50 each. Average round turn (enter/exit) commissions are about $4-$5 per contract depending on broker. Margins (amount required to trade 1 contract) are typically $500 on an intraday basis.

You've also have a range of excellent platforms to choose from to use for charting and depth of market trading.

Plus risk management is more precise since you're not dealing with delta and theta. You can literally define your risk tolerance in points, at support and resistance, etc."



I know all this, but my concern is that I have gone long 50 calls on the q's and then not been able to get out of the trade when it went against me because my broker (IB) was having computer problems and my sell orders weren't executing. My max risk was the $5,000 I had paid for the calls. If I was long or short even 4-5 eminis and couldn't execute on a day when the market makes one of these 300-500 point swings, I have no way of predetermining how much I could lose. So that is the risk that bothers me.
 
that does not follow. The margin requirements are fine. What needs to change is the notion that the markets and individuals who wish to trade are better served by a 25k lower limit. This is an absurdity.

While we're at it, the 100 lot system needs to go as well. It should be illegal for a broker to charge per trade. All trading should be per share.

Quote from seasideheights:

The PDT rule has given traders the ability to trade 4-1 vs 2-1 margin. Traders have the ability to park half their cash in interest bearing accounts while trading the same dollar amounts in their trading accounts since its implementation.

I vote for the PDT rule.
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Hi,

I've yet to make a single trade with real money, nor even a paper trade for that matter, but have spent months researching intraday stock trading and backtesting every day with pen and paper with consistent success.

However.. I've been doing all this with UK (LSE listed) stocks, largely because I'm british and naturally followed the FTSE when I first started out. How is this relevant to this post? Well apparently the 25000 dollar PDT minimum is only applicable to US stocks, leaving me (and anybody else) free to open an account with 10000 or so and daytrade UK stocks as often as I please.
Has anyone considered doing this as a way round the PDT minimum? If you have, but still only want to trade US stocks, then why is that? I can think of a few reasons why US stocks might be more attractive, but I don't think any are particularly significant, as far as I can tell you can capture just the same movement in exactly the same way, especially in the mornings; I'd say that at least while you're account is small any disadvantages of daytrading UK stocks are more than compensated for by the fact that you can trade them as often as you like and thus not have to deviate from your strategy for the sake of an arbitrary rule. Would anyone like to comment on this? I just want to make sure I haven't overlooked something important here before I start.

Apologies if I've interrupted the flow a bit here, but I do think it is relevant.
 
Yeah right! give em' leverage....

Wifey


Quote from brownsfan019:

The rule is meant to keep tiny accounts from churning their $5k into 0 in no time.

Futures do not have the PDT, easy way around that rule.
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