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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (6734)	1/30/2000 7:48:00 PM
From: LPS5	Read Replies (1) \| Respond to of 18137

You can buy and sell as much as you want in a cash account, so long as you have the cash to do so. U.S. Federal Reserve Banking System, Regulation T, Section 220.8 (Cash account) a) Permissible transactions. In a cash account, a creditor, may: (1) Buy for or sell to any customer any security or other asset if: (i) There are sufficient funds in the account; or (ii) The creditor accepts in good faith the customer's agreement that the customer will promptly make full cash payment for the security or asset before selling it and does not contemplate selling it prior to making such payment; (2) Buy from or sell for any customer any security or other asset if: (i) The security is held in the account; or (ii) The creditor accepts in good faith the customer's statement that the security is owned by the customer or the customer's principal, and that it will be promptly deposited in the account; (3) Issue, endorse, or guarantee, or sell an option for any customer as part of a covered option transaction; and (4) Use an escrow agreement in lieu of the cash, cash equivalents or underlying asset position if: (i) In the case of a short call or a short put, the creditor is advised by the customer that the required securities, assets or cash are held by a person authorized to issue an escrow agreement and the creditor independently verifies that the appropriate escrow agreement will be delivered by the person promptly; or (ii) In the case of a call issued, endorsed, guaranteed, or sold on the same day the underlying asset is purchased in the account and the underlying asset is to be delivered to a person authorized to issue an escrow agreement, the creditor verifies that the appropriate escrow agreement will be delivered by the person promptly. (Section 220.4 covers margin accounts.) ny.frb.org In fact, if you look through the text in the link above, there's nothing in Reg T that specifies how many times you can trade in either a cash OR margin account in a day - or any time period (unless this new proposal passes muster). The SEC would definitely not permit - nor would the NASD or NYSE, in my opinion, even try to pass a measure - where there was even the implication that one couldn't liquidate positions at will. More likely, in my opinion, the worst possible implementation of this rule would somewhat resemble those currently pertaining to accounts that for margin reasons are frozen: whereby a customer will always be allowed to execute sell-out or buy-in transactions on existing positions, but would not be allowed to open new ones for the designated period that they fall below the minimum capital requirement OR exhibit the defined signs of "pattern daytrading." LPS5