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Strategies & Market Trends : DAYTRADING Fundamentals

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To: dunlurkin who wrote (12219)	3/9/2001 9:15:15 AM
From: TraderAlan	Read Replies (1) of 18137

dun, I think that the rules will affect a lot of folks. There are a ton of "lite" traders out there playing with smaller accounts. In the usual perverse logic, these folks face much less risk than the ones not affected by the order. Wiping out a 5K account has different ramifications than the new ease with which a 50K account can lose money. Smaller accounts are often mad money while larger ones represent the family savings. Add this latest reg to the FD regs: we are increasing your overnight risk substantially with full disclosure but, at the same time, going to penalize you if you choose to sell without waiting for overnight settlement (and surprises). So smaller accounts will hold longer and increase their risk of experiencing a INTC or EMLX type earnings warning. The funny thing is the level of support given to the new margin rules by the brokerage industry. But that was when they had a hot market and a lot of warm bodies. I suspect they are kicking themselves now for going along with this. Alan

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