Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Apakhabar who wrote (10105)	9/3/2000 10:30:54 PM
From: LPS5	Respond to of 18137

Hey Ap, I understand perfectly what you're asking now, and the policy makes a bit of sense if applied in a punitive/deterrent manner. I'd speculate, offhand, that firms utilizing an overnight policy such as the one you described are doing so to deter "daytraders" - those engaging in, and most importantly, requiring, intraday transaction capability - from taking issues home. By their profile, daytraders typically trade the more volatile issues; and, I'd bet that at some firms, they possibly carry higher average account balances than other, more retail/low-volume clients. So, with a class of customer that tends to speculate in the more volatile issues, and who - may - on average encompass a disproportionate percentage of total funds/securities within the custodial possession of the clearing firm, it may seem prudent to them to curtail certain activities within such accounts. I also suspect - and this, entirely hypothetically on my part - that many clearing firms may have come to recognize the risk that newer traders sitting on losers or averaging down pose. Such a policy as you've described may endeavor both to discourage the practice of taking overnights and the possibility of averaging down the (very) next day. Those are my guesses. LPS5