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

I think my 6 trips on MAGS TODAY WILL DEFINITLY QUALIFY AS DAY TRADING

http://www.nasd.com/Investor/Trading/Daytrading/day_trade_margin.asp

RR

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?

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.

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...

AHA! Knew I couldn't be the only one doing that! LOL

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. :)

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

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

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.

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

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

SEC and the IRS are two different things...

RR

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?"

non as far as I know LOL

"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

It's the "small" investor the SEC is looking out for.


Ya Right.......


RR

"It's the "small" investor the SEC is looking out for."
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"Ya Right......."

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

~aj