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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Davy Crockett who wrote (2769)	10/13/2001 1:46:27 AM
From: Roebear	Respond to of 36161

Example of New daytrader rules from another forum: Subject: Margin Trading Rules Example Symbol: Misc Category: General Comments Message: Example (from MB Trading) of new rules for accounts less than $25,000: Q. What if I day trade in an account that is below $25,000 that is coded a Pattern Day Trade Account? A. You may day trade in a pattern day trade account up to 1 times cash available on an aggregate basis. For example: Account comes into the day with $20k = cash available Buy 500 shares of DELL at 20 = $10,000 Sell 500 shares of DELL at 20 = $10,000 Buy 400 shares of AAPL at 25 = $10,000 Sell 400 shares of AAPL at 25 = $10,000 The aggregate sum of the buys is $20,000. No trading call was created. However, if the account were to initiate another purchase or short sale (open an additional position) a day trade call would be created in the amount exceeding the cash available amount. Q. If my account is below the $25,000 minimum and I am coded as a Pattern Day Trader, what happens if I liquidate an overnight position and repurchase the same security? How does that affect my buying power? A. Under the new rules, the liquidation of an overnight position will not be counted towards a day trade. For Example: An account with $20,000 equity... Day 1: Buy $40,000 CSCO Day 2: Sell $40,000 CSCO Day 2: Buy $40,000 CSCO Under this example no day trading call would be created because of same day substitution. A sell of an overnight position and subsequent buy of the same security on the same days (which does not constitute a day trade) is treated as a same day substitution and the customer can use the proceeds of the sale towards a new purchase. Good example, but your broker may interpret the rules differently. Check with them before you trade. Roebear