DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: LPS5 who wrote (10101)	9/3/2000 9:42:50 PM
From: Apakhabar	Read Replies (1) of 18137

LPS5 <<<Could you rephrase it?>>> My question didn't really make sense. We were talking about the risk assumed by firms lending margin on overnights to daytraders. I want to know what risk the firms believe they are lessening by lowering the daytrader's buying power on a security that was held overnight, sold in the morning, and bought back. To wit: The firms take a risk when they lend on margin and this risk is presumably at its greatest overnight. Say my account is 100k and I hold 200k worth of XYZ overnight, and I sell it in the morning. Now the risk to the lending firm is gone. At noon I want to buy back 200k of XYZ but I can't, the broker will only allow me to buy 150k. What is the purpose of this intraday restriction? How is this risk greater than the risk taken the previous day when I bought 200k of XYZ? If it was okay to buy that much the previous day, why isn't okay today? It's just not logical to me. Or to Datek, since they don't have this silly restriction.

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