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

To: shneed who wrote (10032)	9/2/2000 11:39:31 AM
From: OZ	Read Replies (2) \| Respond to of 18137

Buying or trading the same securities more than 2 or 3 times. Using the same funds to purchase other securities from the previous day The worst thing one can do to buying power is to sell a position that was held overnight in the morning and then after trading in and out of several other positions in different stocks the next day, buy it back. The trade is now considered a "day trade" and if the sum of the value of all transactions after the initial morning sale (i.e. "selling into a gap) up to the repurchase of the previously held stock exceeds ones buying power, a daytrading margin call will occur for what seems like an obscene figure. It is a ridiculous fallacy in the system that will be corrected if the new margin requirments are implemented. As far as your broker being "wrong', that is highly unlikely since the house can make its own rules if they are MORE stringent than the mandated guidelines. Sounds like you might be using a discount versus a direct access broker. Oz

To: shneed who wrote (10032)	9/2/2000 11:42:09 AM
From: exdaytrader76	Read Replies (1) \| Respond to of 18137

Rule 2520 Proposed changes: sec.gov It sounds like they are enforcing the changes that I thought had only been proposed, not enacted. I.E., $25K minimum in acct at all times and that ridiculous margin requirement where they add up the MV of all the stocks you traded in a day and say that you have to put up funds as though you had all the positions on at the same time. There are no bulletins posted at www.nasdr.com that say the changes have been passed, and this would be a HUGE deal. I've got to call Penson on Tuesday to ask them. If they voluntarily adopted the proposed changes, I am in for one hell of a week. The proposed changes to 2520 are WRONG. All they would do is ensure that day trading is only allowed for the extremely wealthy.

To: shneed who wrote (10032)	9/2/2000 2:08:26 PM
From: Wayners	Read Replies (1) \| Respond to of 18137

OZ is right. Those are the rules. It really doesn't make sense but those are the rules. From a logic only standpoint, I find it funny that one can reuse funds from a daytrade sale the same day but you can't reuse funds from an overniter the same day. Makes me wonder what risks they're trying to avoid here. You would think the rules would be written to lower brokerage risk but they don't. The risk is the SAME for both situations, yet they differentiate between the two. The brokerages only risk: the opposite side of the trade renegs on the trade due to insolvency.