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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Apakhabar who wrote (10094)9/3/2000 7:08:10 PM
From: Tai Jin  Read Replies (1) of 18137
 
I don't understand how the statement that "overnight positions are not cleared until the end of the day you close them" translates into the broker "thinking" that a morning sale of the overnight position is a short sale. If this were really true, that when you are flat the broker thinks you are short, then is it not logical to assume that if you just buy the same amount of shares again, the broker will now think you have gone from short to flat? Of course, nobody has the experience of buying the shares and being long in reality, and having one's BP reflect a flat position.

That's how they do the accounting (at least at Southwest). As soon as you sell your position, the overnight margin is released for use. You can use that margin to trade any other stock. But as soon as you buy that same stock again, you're considered to have reentered your position at a 50% margin instead of 25%. It's a problem of not knowing if these are day trades or RegT trades until the end of the day. So they just treat all trades in a stock as day trades until the final trades that create a net position at the end of the day. The RegT trades are always the last trades in your overnight stocks.

I also have a Datek acct and as you say they don't have this problem. They certainly close out positions right away instead of waiting until the end of the day to figure it out. I also think Datek's overnight margin is the same as the intraday margin of 50% (for longs), but I don't know if that has any relevance.

...tai
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