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

To: Tai Jin who wrote (10080)	9/3/2000 4:05:03 PM
From: Apakhabar	Read Replies (2) \| Respond to of 18137

Tai, I don't understand how the statement that "overnight positions are not cleared until the end of the day you close them" translates into the broker "thinking" that a morning sale of the overnight position is a short sale. If this were really true, that when you are flat the broker thinks you are short, then is it not logical to assume that if you just buy the same amount of shares again, the broker will now think you have gone from short to flat? Of course, nobody has the experience of buying the shares and being long in reality, and having one's BP reflect a flat position. Basically, the clearinghouses or the brokerages who spout this "explanation" are bullshitting. I think the truth must be that they have their own reasons for discouraging daytraders from holding overnight positions in stocks they trade very actively. My daytrading account clears with Southwest, and I also still have an account with Datek. When Datek was my only account (prior to 1999) I sometimes held a large position (close to my BP) overnight, sold it all in the morning, bought much of it back later that day, sold some, bought some back etc. and NEVER had a margin call. Likewise, my broker previous to Southwest cleared through JB Oxford, and they, like Datek, updated BP in real time so if an overnight long was sold in the morning the trader had all his BP restored, period, in real time. Surely the clearinghouses that engage in this "end of the day clearing" chatter have a financial incentive to "interpret" the margin-call rules as they do, or why would they do it? I suspect they have done some statistical work and discovered that allowing daytraders to hold stock overnight that they are day-trading as opposed to swing-trading poses a risk. I'd love to hear that risk explained, however.