You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Tell SEC and NASD you oppose daytrading rules on Options
- Thread starter hii a_ooiioo_a
- Start date
Completely absurd. Stocks can be just as risky as options. Ask those who bought THC in the 50's a week or two ago (now at a whopping $14.90). Let's just limit stock purchases to one a week.
When is the govt going to wake up, and let people be grown ups who take responsibility for their own actions? You can blow your entire paycheck on state sponsored lottery tickets, but if you buy $60 worth of options in one day, you're doing something wrong. Will the lunacy ever stop?
When is the govt going to wake up, and let people be grown ups who take responsibility for their own actions? You can blow your entire paycheck on state sponsored lottery tickets, but if you buy $60 worth of options in one day, you're doing something wrong. Will the lunacy ever stop?
Completely absurd. Stocks can be just as risky as options. Ask those who bought THC in the 50's a week or two ago (now at a whopping $14.90). Let's just limit stock purchases to one a week.
That's quite true. These PDT rules help market manipulators to pin small investors and slaughter them in fashion.
When you go in case like THC, it rises if you are lucky but you cannot sell. Then the next day, it tanks more. When you cut loss, it favors you by going lower. But unfortunately, you will not be able to buy at lower price. The next day, your target runs higher away from you. And when you chase, right now, whole pin cycle starts again.
regarding options in a cash account, I am in the process of opening another account at IB as a cash account. I have done some checking into the cash account situation, and here is some info I've learned:
(for simplicity's sake) if you have a 10,000 account and trade 5000 in one trade, the profits from the 5000 trade are not settled for 3 days. yes three (again in a cash, not margin, account). What I have not been able to establish to my satisfaction is whether the underlying proceeds of 5000 are immediately available on the close of the trade. It doesnt seem that they will, so you'd probably have to wait the same three days to be able to utilize the underlying 5000. so, then you'd have to tap into the remaining 5000 in the account and wait another 3 days for settlement.
hope this helps and if anyone knows if I'm wrong about any of this, dont hesitate to inform us all
(for simplicity's sake) if you have a 10,000 account and trade 5000 in one trade, the profits from the 5000 trade are not settled for 3 days. yes three (again in a cash, not margin, account). What I have not been able to establish to my satisfaction is whether the underlying proceeds of 5000 are immediately available on the close of the trade. It doesnt seem that they will, so you'd probably have to wait the same three days to be able to utilize the underlying 5000. so, then you'd have to tap into the remaining 5000 in the account and wait another 3 days for settlement.
hope this helps and if anyone knows if I'm wrong about any of this, dont hesitate to inform us all
Stock Options
Covered call writing (covered shares are restricted), and buying calls and buying puts. Cash from the sale of options settles in one business day. You must also have Stocks capabilities for a cash account.
From the IB Account Capabilities page describing Options Cash account. Options settle in one day. I think that actually means the same day. But at most it's next day.
The NASD daytrading rule is all about margin. It shouldn't apply to options traded from a cash account.
Another thing: the daytrade limit is supposed to be per account, not per individual. So, if you now have two accounts, instead of one, you have 6 daytrades per 5 days between the two of them.
Do your stock trades out of your margin account (to avoid the three day settlement hassles) and do your option trades from the cash account (which I still believe should avoid limits on trading the long options altogether).
Covered call writing (covered shares are restricted), and buying calls and buying puts. Cash from the sale of options settles in one business day. You must also have Stocks capabilities for a cash account.
From the IB Account Capabilities page describing Options Cash account. Options settle in one day. I think that actually means the same day. But at most it's next day.
The NASD daytrading rule is all about margin. It shouldn't apply to options traded from a cash account.
Another thing: the daytrade limit is supposed to be per account, not per individual. So, if you now have two accounts, instead of one, you have 6 daytrades per 5 days between the two of them.
Do your stock trades out of your margin account (to avoid the three day settlement hassles) and do your option trades from the cash account (which I still believe should avoid limits on trading the long options altogether).
Quote from hii a_ooiioo_a:
snip...
From the IB Account Capabilities page describing Options Cash account. Options settle in one day. I think that actually means the same day. But at most it's next day.
The NASD daytrading rule is all about margin. It shouldn't apply to options traded from a cash account.
Another thing: the daytrade limit is supposed to be per account, not per individual. So, if you now have two accounts, instead of one, you have 6 daytrades per 5 days between the two of them.
Do your stock trades out of your margin account (to avoid the three day settlement hassles) and do your option trades from the cash account (which I still believe should avoid limits on trading the long options altogether). [/B]
agreed that NASD should not have implemented a modification to the rule like this - I'm trying to look into all this and would appreciate any info I can get to try to fight this.
my attempt to start (a) new account(s) is something I'm trying to do so that I can trade at least a little more than since the rule went into effect - it is 'killing me' too. I am a much better short term trader and this overnight garbage is not for me, even though I'd like to get into more swing trades eventually.
If anyone has any info about the actual modification and implementation of the new margin rule for options trades ( documents, dates, blah blah) please dont hesitate to post. I did some cursory research into this issue at the NASD website, but there was nothing I could really sink my teeth into.
When I wrote "It shouldn't apply to options traded from a cash account." what I meant is I believe you can freely trade options from a cash account.
You will know as soon as your cash account is funded, I would try to make one options daytrade, and watch the daytrades counter to see if it goes to 2. If it stays at 3 then it's not counting options daytrades.
I am going to be funding my new account this week too, so I will find out for sure.
At the very worst, we can just open one new account for each $2,000, each account will give us three more daytrades per week.
You will know as soon as your cash account is funded, I would try to make one options daytrade, and watch the daytrades counter to see if it goes to 2. If it stays at 3 then it's not counting options daytrades.
I am going to be funding my new account this week too, so I will find out for sure.
At the very worst, we can just open one new account for each $2,000, each account will give us three more daytrades per week.