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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Tom DuBois who wrote (4580)	6/17/1999 3:18:00 PM
From: Mama Bear	Respond to of 4969

You will get a Reg T call if you make a trade in excess of your BP. A Reg T call must be satisfied with fresh funds, you won't be allowed to liquidate a position to make good. WH is my broker, and I'm familiar with Reg T because they used to send out the Reg T calls if you made consecutive trades that aggregated to more than your BP. They've got that bug fixed now. Barb

To: Tom DuBois who wrote (4580)	6/17/1999 3:32:00 PM
From: Mama Bear	Read Replies (1) \| Respond to of 4969

I forgot to say in the post above that account restriction will only occur if you don't or can't meet the Reg T call. My understanding is restricted isn't 'frozen', just every trade will have to be ok'd by a rep to make sure you have the money. As long as you have the fresh funds to meet the call you can daytrade beyond your BP to your hearts content. Barb

To: Tom DuBois who wrote (4580)	6/17/1999 4:12:00 PM
From: LPS5	Read Replies (2) \| Respond to of 4969

Tom, A broker-dealer's margin lending rules may only be (a) the same or (b)stricter than Federal Reserve, SEC, and SRO (NYSE or NASD, depending on your firm) rules. Basically, don't forget that "daytrading an account," and A "daytrading (coded) account" are different. One could daytrade any type of account (retail account, cash account, etc) but an account that is coded as a daytrading account - at least through a firm that I am familiar with - has distinctly different INTRADAY calculation methods, whereas their overnight calculations are the same as others. If you fail to meet a margin call, your account can be frozen. Accounts can also be restricted or have buy-ins/sell-outs initiated for debit balances, etc. In theory what you say is possible - and again, depending upon the firm - I've seen smaller firms that permit someone to trade their butt off, go wildly in excess of their buying power, and then facilitate the journaling in of funds cover the margin call overnight. Even though this is technically within the letter of the rules, large, established firms don't permit - let alone encourage - this on a regular, let alone daily, basis. It is certainly against the "spirit" of margin rules (fiduciary duty of a brokerage firm, and all); people shouldn't be encouraged - or aided - to trade in sizes and volumes that expose them to losses they can't afford. So, all the answers you were given are basically correct, depending upon how exactly the firm intends to enforce them. LPS5

To: Tom DuBois who wrote (4580)	6/20/1999 7:03:00 AM
From: steve goldman	Read Replies (2) \| Respond to of 4969

Tom, #1 is the answer. Consider buying power like a leash. YOu can go out and back as much as you want intra-day. You go beyond it, its called a daytrading violation, and if you dont come in with the cash to satisfy the deficiency, you are subject to a 90day restriction...actualy, with Pershing (and i'm not sure if its just pershing or the nasd in general), but you have to do it three times. After the third, you are restricted. You cant buy something without full CASH for 90days, no margin at all ...only cash purchases. Again, you created this because you closed it out intraday and their systems see the excess intra day, and you closed. If you take it home overnight, in excess (long or short the stock), your account will require a deposit immediately. You will proabably generate a house or fed call. house being more restrictive, assuming the firm let you take the position. Regards,S steve@yamner.com