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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (11265)	6/4/2004 1:35:48 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 12617

I found it. federalreserve.gov This interpretation clearly suggests that using money in a cash account multiple times in the same day is not permitted. It says nothing about the nonsensical limitation of not being permitted to use the funds received from the sale of a paid security to make another purchase. In fact, there is another interpretation issued the day prior that suggests the use of funds from the sale of a security may be used to repurchase the same security, and of course it can be used to purchase something else. federalreserve.gov Neither of these negate the argument that if the interpretation of limiting the use of unsettled funds in a cash account is valid, then the same interpretation has to restrict currently accepted daytrading practices in a margin account, where unsettled funds are used freely without restriction. The reference to section Regulation T 220.4(c)(1) for margin accounts is probably being held out as a justification for daytrading, but clearly this section says nothing about permitting the use of unsettled funds. It merely specifies that a margin calculation is to be based on the net trades for a day. No reasonable person can use these regulations to justify the arguments against reuse of funds in a cash account while blatantly disregarding the use of unsettled funds in a margin account. The real problem is these regulations are outdated and being inconsistently applied to situations for which they were never intended. NASD is using this to back door an extension of the daytrading rules to cash accounts, where they simply do not apply by definition of daytrading in their own SEC approved rules. Statements like this one in the article prove the point Day trading is permitted in cash accounts with greater than $25,000, noted Aegis Frumento, partner with Duane Morris in New York. This is pure nonsense. The size of a cash account is totally irrelevant.