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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (2070)	2/13/2000 2:13:00 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 2120

Wayne, For my understanding, I need to break this example down. Let's say I have the $100,000 AMZN position with $50,000 equity. As you say, with the old rule my DT buying power is $50,000. The thing I need to know first is if I sell the AMZN and don't get involved in the "buying it back" issue, does my DT buying power increase for that day, or is it still limited to $50,000? ED: I need to get this point clear in my head before I think too hard about your latest messages. Need to take off for the day. Appreciate your input on these issues. I think the proposed new treatment of closed positions is intended to put them on an equal footing with any other DT purchases you might make. It really is silly to say you can buy every other stock in the world except for the one you held overnight. My thinking on the motivation for 4x is that it makes the margin requirement the same for all positions in your account (during the day). Daytrading is allowed in the first place because of an interpretation of Reg T that says anything above the maintenance margin is available for use. Why distinguish between the equity you must have in any overnight positions, and the equity you must have in a DT position? It's an easier calculation to just say your total "investment" during the day is your account equity times a single multiplier, 4, instead of the current calculation which effectively treats some of your equity one way, and the rest of it another way: Total investment = 4x(maintenance margin equity in stocks held overnight) + 2x(remaining equity, i.e., maintenance excess). Dan