Dan,
Here is some more information on that proposal from Ken Wolff from mtrader.
SEC UPDATE
**** UPDATE January 27, 2000 ***
Traders,
I wanted to update you all on the NYSE and NASD proposal to raise the minimum equity requirements for Daytraders to trade on margin. The current rule is you must have 2K in your account to daytrade on margin. The new proposal raises it to 25K. This means, if you are identified as a daytrader/pattern trader and you do NOT have a minimum balance of 25K in your account, you can NOT trade on margin.
We at MTrader.com feel this is not only unfair but discriminatory to the smaller daytrader. The premise behind this proposal, as stated by both exchanges, is to help protect the smaller investor. That being the case, then why did they raise the buying power from 2:1 to 4:1. In other words, if you have 10K you can now buy 40K worth of stock (if you have greater than 25K in your port). If you are trying to protect traders from the dangers of daytrading, why give them more rope to hang themselves with the additional buying power.
Something smells in Denmark, and we aim to find out what it is. The exchanges opened the doors with SOES and other tools to the small daytrader and said ?come on in and play?. Well, we, the small daytrader took that offer and came in force. Daytrading has taken off. The shear numbers of small daytraders making their own trading decisions on their personal laptop is staggering. So staggering, that we have created HUGE volatility in the markets ........ and they DON'T LIKE IT. In our opinion, this may be a way to control volatility in the markets, to limit, or take away a very very valuable tool that this hidden brigade of small daytraders uses.
Although we agree that daytrading has increased risk, but we do not agree with their solution. The solution is education. That is why MTrader.com has done so well. They say 80% of daytraders lose. We believe these numbers to be so high because of this lack of education. We prove this on a day to day basis in the mtrader.com daytrading/swingtrading service. The numbers don't lie. Education is the answer, not taking away a valuable tool that is available to anyone else.
They are basically saying that someone with a 25K port makes better trading decisions than someone with a 15 or a 20K port. Nonsense. Stop loss discipline and a regimented, disciplined approach to trading is the key. WE HAVE PROVEN THAT WITH ALL OUR MEMBERS.
We are asking for your help. We NEED your help to fight this issue. They are sneaking this one in right under our noses. The NYSE has apparently already filed with the SEC on 13 or 14 January. The comment period was supposed to be announced and up on the web page for public comment. To date is has not. I just received a fax from the SEC that states the comment period has already begun on only goes for 21 days. This means all comments MUST be received by the SEC by 3 February 2000. This is less than a week away.
They do not have an automated process to submit your comments, you must send your comments, believe it or not, via SNAIL MAIL. So time is off the essence.
Please send your comments and well thought out thoughts to the following address
Secretary, Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609
*** important *** All submissions should refer to File Number SR-NYSE-99-47
*** important *** You must mail in 6 copies of your comments.
Please present well thought out comments and not just a "bitch" letter. Tell them why it is wrong, and what your recommendation is. Remember, this is for the NYSE Rule 431 ONLY and does not include the NASD proposal.
Once the NASD rule is filed with the SEC we will ask you to contact them with your comments at that time, and will provide clear directions on how to do it.
PLEASE HELP! The deadline is on February 2, 2000. This may not affect you now, but it affects many others and it may affect you someday.
Let's not sit here and take this sitting down. Lets let our voice be heard.
If you are sitting there saying, my one little vote will do no good.... please don't think that. The SEC is actually a great organization and they actually listen to the small guy. They WILL take our comments seriously and WILL listen to us. Stand up and be counted, mail that letter!
Good Luck
Ken Wolff
www.mtrader.com |
