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Strategies & Market Trends : New Margin requirements
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To: H-Man who wrote ()12/12/1999 5:27:00 PM
From: H-Man  Read Replies (1) of 20
 
this from alan on another thread....

It's a real question as to how much liquidity is actually
provided by the target of this proposed change. First off, it's only directed at direct access firms,
not discount brokers. The discounters are larger by many-fold in the total assets handled.

Of course traders at EDTs trade and flip more frequently. But what percentage of this liquidity actually comes from traders with very small accounts.
Those who have moved to EDTs generally have the assets and experience that dictated the transition. Many of the EDTs already have minimum
account requirements that equal or exceed the new rules.

Rather than force traders out of the game, if this goes through I suspect we'll see a further blossoming of short-term swing trading. That may provide the
standard proving ground for those with an itch to get into the day trading game.

I'm not supporting or defending the rule proposal by any means. But those of us around this stuff for awhile privately think it's insanity for most newbies
to jump full force into day trading when they haven't mastered the easier stuff. Like trying to fly a 747 before learning to land a Cessna safely. Of course
there are gifted individuals who can pick up the game succeed with little experience.

From reading the articles on this, appears the EDTs may have already quietly cut a deal with the exchanges. Berber and other B/Ds sound like good
solders jumping into line.

Alan
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