Remove the Pattern Day Trading Rulle - Vote

Quote from brynno:

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.
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isnt there a stamp tax on uk stocks? meaning every time you buy a stock they add a fee of say 1%. makes it very difficult to daytade when your looking to make pennies. btw i have no idea what the transaction tax is in the uk. but there is no transaction tax inthe usa. only a sec tax that is minimal
 
Quote from brynno:

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.
More...

How do you get around the tranasction tax in UK stocks? I thought one existed but I could be wrong. If so I am sorry for asking a stupid question
 
Quote from chrismontez:

"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.
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I don't know how you came to that conclusion.

First of all, if you fall below maintenance margin, you'll automatically have you position liquidated. For instance, day trade margins aside, let's say you have $7000 in your account. You bought 1 ES contract using $6188 or your funds to met the performance bond for 1 contract. if your account falls below $4950, you would face a margin call. but since most brokerages don't bother with margin calls, they would simply close out your position the moment your account value fell below that level leaving you with an amount very close to $4950 less commission and slippage of a few ticks if any depending on market conditions.


Second of all, trade with stops. Even bracketed OCO stops and you'll be able to define your loss within a few ticks. So you won't have to worry about losing untold sums between breakeven and falling below maintenance margin.

I have never seen anyone in my trading career get blown out and owe money from a futures trade. Especially with liquid contracts.
 
Yeah I like not being able to buy and sell as I wish. That's REAL true "free-market" thinking.......The American way.

As fucked up as possible.

Look at what we've done here with the friggin economy...guessing and over-reacting..... and we can still only make 3 round trips in 5 days.
 
Quote from athlonmank8:

Yeah I like not being able to buy and sell as I wish. That's REAL true "free-market" thinking.......The American way.

As fucked up as possible.

Look at what we've done here with the friggin economy...guessing and over-reacting..... and we can still only make 3 round trips in 5 days.
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its still free market you can make 1000 trades if you like, you just cant use leverage in this circumstance.
 
I like the rule.

I think the anger and storng opinions expressed are from those without 25K and do not want to get a job.
 
Quote from nursebee:

I like the rule.
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Why? So far people here that say the rule is good have yet to give a solid logical reason why it's good.


I think the anger and storng opinions expressed are from those without 25K and do not want to get a job.
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Sorry buddy, I have a job, and I also have a life with other things that I need to pay for this year (house remodeling, wedding) which precludes me putting 25K in my account.
 
Quote from YngvaiMalmsteve:

Why? So far people here that say the rule is good have yet to give a solid logical reason why it's good.
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At the same time, no one has given a solid logical reason why it's bad.

Why?

It's not something that lends itself to "solid logical reasoning" either way. It's a rule defined by political ideology. Even it's threshold is arbitrary. But it accomplishes it's goal. To provide the illusion of the government safeguarding the markets and its participants. Mostly, that's all it need do.

Most who complain about it just haven't fully explored all the instruments available for day trading which have no such barriers of entry. The majority of them having significant advantages to stocks.
 
DMAN:Most who complain about it just haven't fully explored all the instruments available for day trading which have no such barriers of entry. The majority of them having significant advantages to stocks.

Name some other than the exclusion rule.
Thanks
 
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