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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: ivan solotaroff who wrote (10694)	1/16/1998 12:01:00 PM
From: PitBull	Respond to of 79296

for everyone: a question This is a very important question I have that relates to trading. Please follow the scenario, and without judgement as to whether someone would trade this successfully or not. This is a question about SEC rules. 1. Bill has $20,000.oo cash in his online broker account. This money is free and clear. (new account). There is NO doubt that Bill DEPOSITED the $20,000.oo and it is AVAILABLE. 2. Monday morning bill buys $20,000.oo of XYZ stock (forget commissions in this scenario). Monday afternoon Bill sells XYZ stock for $21,000.oo, leaving $1,000.oo profit. 3. Tuesday morning Bill does the same thing. He buys $20,000.oo XYZ stock and sells it that same afternoon, leaving $1,000.oo profit. 4. Wednesday--same thing 5. Thursday--same thing 6. Friday--same thing Summary: 1. Bill bought $100,000.oo of stock 2. Bill made $5,000.oo profit 3. Bill never bought more stock than he had actual deposited money in his account. 4. At no time was Bill putting the brokerage firm at risk. 5. Is something wrong with this scenario IN TERMS of following SEC rules ? 6. The SEC has rules about "pattern day traders" that trade on margin, because of the different parties that are put at risk. But in THIS scenario the cash was available. Does the SEC have any restrictions for day traders that do NOT trade on margin? Thank you for treating this question/scenario seriously. You can email me at sprout678@hotmail.com