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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade
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To: Dan Duchardt who wrote (2064)2/12/2000 6:09:00 PM
From: Wayners   of 2120
 
Since they don't provide any sample calculations and their wording is vague there are several legitimate interpretations of this garbage they have written. These rules will never pass as written. Suddenly the guy that has $50,000 cash in his account and buys $20,000 of MSFT (100% ownership by this guy) and sells it and does this 2 more times or even 50 more times during the day is somehow exposing the broker/dealer to some kind of margin risk is preposterous. Technically it is margin lending because trades settle in T+3, but in reality is this acitivty RISKY? Hell NO. The guy has paid outright for this stock and is only dependent on the guy that has agreed to buy the stock from him with coming up with the cash to do so by the settlement date. Whats the risk of the guy that buys the stock from the daytrader from not coming up with the money to settle the trade? I think its pretty damn small. Now they're SAYING that such risk exists TO JUSTIFY this proposed rule. Now if they are SAYING that this is a real risk, then lets see the actual DATA, yes DATA proving this great RISK. I want to know how many broker/dealers have gone bust because the other party reneged on a trade. I don't want somebody saying its a problem or saying this risk exists without SUPPORING DATA PROVING IT. There must be a lot of reneging or backing out of trades that I don't know about. LOL.
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