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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Dan Duchardt who wrote (10055)9/2/2000 6:47:00 PM
From: Wayners  Read Replies (1) of 18137
 
Dan,

Maybe this would help him. This taken right from Rule 2520. It prohibits using closed out positions to open new positions while daytrading in a cash account. We already knew this BUT doesn't this imply that if you can't do it in a cash account...that you can do it in a margin account which is what day trading is all about anyways. If using closed out positions to open new positions while daytrading was also not allowed in a margin account...wouldn't it specifically prohibit the same activity in a margin account also? This is the best argument I can come up with for now.

9) Free-Riding in Cash Accounts Prohibited

No member shall permit a customer (other than a broker/dealer or a “designated account”) to make a practice, directly or indirectly, of effecting transactions in a cash account where the cost of securities purchased is met by the sale of the same securities. No member shall permit a customer to make a practice of selling securities with them in a cash account which are to be received against payment from another broker/dealer where such securities were purchased and are not yet paid for. A member transferring an account which is subject to a Regulation T 90-day freeze to another member firm shall inform the receiving member of such 90-day freeze.
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