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

To: Apakhabar who wrote (13317)	7/8/2001 8:41:49 AM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

That's my interpretation although I've seen discussion that it is cumulative. There may be some brokers who apply it the second way, but no EDT in its right mind would do it because it means bankrupcy. Alan

To: Apakhabar who wrote (13317)	7/8/2001 12:52:13 PM
From: TheStockStalker	Read Replies (1) \| Respond to of 18137

Am I right to infer that the 4x buying power for "qualified" PDTs means that somebody Ahhhhhh. Nice to see that someone is now looking at the PDT designation as something to be qualified for and not as a scarlet letter. Under the new rules, anyone with a margin account over the 25k can at any one time own 4 times the "excess equity" in their account. So the trader in your account with the 50K can in fact own 200K in stock at one time intraday and CAN in fact flip it over and over until the cumulative totals for the day go into the millions. Where the accumulation of the daily totals does come into effect is if they go over the 200K (4x) an any one point during the day. They will then get a day trading call for a whopping 50% of the accumulated daily totals for that day and probably get wiped out. When people talk to there broker, they have to realize that they are talking many times to just a working stiff and perhaps even a 21 year old with very little vested interest in what is going on and subject to many mistake in interpretation. While it is true that the shop can make its own tighter margin rules and policies, what I wrote above is the way and the limit within each of the trading firms can operate and still comply. Most if not ALL of the day trading shops are going to do it exactly as I describe and if you hear differently, it is probably a 2nd or 3rd hand version of something that was incorrect to begin with. Going overnight is still going to be at 2 to 1 though as we have talked about before, if one is going to become an investor and keep adding at a rate of 50% of excess equity on a dally basis, they too can take it all the way down to the min maintenance number (as low as 25%) and squeeze out well more than the 2 to 1 on those longer holds. I think I remember even you witnessing how one gets as many versions of how margin works when asking different people the same question even at the same brokerage. In my experiences from working at a brokerage, the office manager frequently knows and the compliance officer probably knows the truth. PDT