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Author: EllenB116 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36691  
Subject: Daytrader Date: 4/19/2004 9:12 PM
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My understanding is if you trade in and out of any security (buy and sell) in the same day and you repeat this activity on that particular stock four times within "a rolling 5 business day period", you can be classed as a pattern daytrader. But as I understand it, the only restrictions have to do with minimum balances in your account and margin requirements.
And, after MAGS, I guess that's what they'll classify me as.

I don't think there's anything else involved. If I'm wrong - somebody please let me know what I'm missing.

ellen
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Author: zyaw Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25209 of 36691
Subject: Re: Daytrader Date: 4/19/2004 9:50 PM
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I think my 6 trips on MAGS TODAY WILL DEFINITLY QUALIFY AS DAY TRADING

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Author: RayRohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25210 of 36691
Subject: Re: Daytrader Date: 4/19/2004 9:59 PM
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http://www.nasd.com/Investor/Trading/Daytrading/day_trade_margin.asp

RR



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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25211 of 36691
Subject: Re: Daytrader Date: 4/19/2004 10:24 PM
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My understanding is if you trade in and out of any security (buy and sell) in the same day and you repeat this activity on that particular stock four times within "a rolling 5 business day period", you can be classed as a pattern daytrader

Is that 5 times for one stock or 5 day trades total (any stocks) in a rolling 5 day period?

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Author: BaptizedByFire One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25212 of 36691
Subject: Re: Daytrader Date: 4/19/2004 10:27 PM
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All that IS true, BUT...if you have more than one account (various ESAs, Roths, and Individual accounts)....its easier to avoid those regulations, to an extent anyway.

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Author: SoMch2Knw Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25213 of 36691
Subject: Re: Daytrader Date: 4/19/2004 10:41 PM
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All that IS true, BUT...if you have more than one account (various ESAs, Roths, and Individual accounts)....its easier to avoid those regulations, to an extent anyway.


lol

Your learning all the tricks...
Are you sure your a beginner...




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Author: BaptizedByFire One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25215 of 36691
Subject: Re: Daytrader Date: 4/19/2004 10:50 PM
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AHA! Knew I couldn't be the only one doing that! LOL

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Author: BaptizedByFire One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25216 of 36691
Subject: Re: Daytrader Date: 4/19/2004 10:52 PM
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And if I wasn't a beginner....do you really think I would have been so stupid to keep playing TASR? Argh! Should have pegged that one as a Looooong when I started. Oh well, live and learn. :)

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Author: averagjoe Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25218 of 36691
Subject: Re: Daytrader Date: 4/20/2004 1:00 AM
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My understanding is if you trade in and out of any security (buy and sell) in the same day and you repeat this activity on that particular stock four times within "a rolling 5 business day period", you can be classed as a pattern daytrader
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Is that 5 times for one stock or 5 day trades total (any stocks) in a rolling 5 day period?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Read the rule again. It says Four or more times, which means you're limited to three; four falls within "four or more". And it doesn't matter whether it's the same stock or several stocks. Three trades, that's all.

~aj

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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25219 of 36691
Subject: Re: Daytrader Date: 4/20/2004 4:16 AM
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I'm glad to see this discussion, because it is something I've been careful of.

And it doesn't matter whether it's the same stock or several stocks.

That's what I thought. Thanks for clarifying, AJ. (Also, I mistyped my last. I meant 4, not 5.)

BTW, the way I read it, if you maintain $25,000 equity, the rule doesn't apply. Am I correct?

Cap

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Author: hk2 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25220 of 36691
Subject: Re: Daytrader Date: 4/20/2004 8:50 AM
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BTW, the way I read it, if you maintain $25,000 equity, the rule doesn't apply. Am I correct?

Correct, although you'll still be classified as a pattern daytrader.

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Author: RayRohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25221 of 36691
Subject: Re: Daytrader Date: 4/20/2004 9:01 AM
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BTW, the way I read it, if you maintain $25,000 equity, the rule doesn't apply. Am I correct?

Correct, although you'll still be classified as a pattern daytrader.


and if your equity falls below 25k you will get a margin call to bring it back up...

RR



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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25229 of 36691
Subject: Re: Daytrader Date: 4/20/2004 9:39 PM
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BTW, the way I read it, if you maintain $25,000 equity, the rule doesn't apply. Am I correct?

Correct, although you'll still be classified as a pattern daytrader.

and if your equity falls below 25k you will get a margin call to bring it back up...


Okay, I got all that. But what other implications are there to being classified as a "pattern day trader?" I don't believe that automatically qualifies you as a "trader" for IRS purposes. Or does it?

Cap


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Author: RayRohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25230 of 36691
Subject: Re: Daytrader Date: 4/20/2004 10:17 PM
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SEC and the IRS are two different things...

RR





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Author: Capcon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25231 of 36691
Subject: Re: Daytrader Date: 4/20/2004 10:30 PM
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SEC and the IRS are two different things...

I understand that, Ray, thanks. So then my original question:

But what other implications are there to being classified as a "pattern day trader?"

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Author: RayRohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25233 of 36691
Subject: Re: Daytrader Date: 4/20/2004 10:45 PM
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non as far as I know LOL



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Author: averagjoe Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25235 of 36691
Subject: Re: Daytrader Date: 4/21/2004 1:11 AM
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"But what other implications are there to being classified as a "pattern day trader?"

None: having $25K equity in your account entitles you to making all the blunders you want, and being called a pattern day trader means about as much as the old "sticks and stones" axiom... It's the "small" investor the SEC is looking out for.

~aj

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Author: RayRohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25237 of 36691
Subject: Re: Daytrader Date: 4/21/2004 8:44 AM
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It's the "small" investor the SEC is looking out for.


Ya Right.......


RR




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Author: averagjoe Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25245 of 36691
Subject: Re: Daytrader Date: 4/21/2004 1:08 PM
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"It's the "small" investor the SEC is looking out for."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"Ya Right......."


At least, that was the justification the SEC gave for inventing the rule.

~aj


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