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Author: Calabogie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36696  
Subject: New margin rules explained Date: 6/27/2001 2:05 PM
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http://www.tradecast.com/newsletter/html/nasd.html

That site says it about as well as I've seen it. Almost everyone here that I've seen qualifies as a "pattern day trader" according to their requirements. That means you MUST carry a minimum of 25k in your account in order to use margin. If you want to short, you MUST have margin.
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Author: sonar69 Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6195 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 3:31 PM
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Define for the first time who is considered a "day trader"

Under the rule changes, a "pattern day trader" is a customer who day trades four or more times in five business days, and such activity is more than six percent of that customer's total trading activity for the five-day period.

>>>>>>>>>>>>>>>>>>

Does a "day trade" mean buy & sell or short and cover the same stock in the same day?

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Author: phjjr Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6201 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 4:21 PM
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Correct me if I am wrong.
If I buy & sell the same stock in the same day four or more times in a 5 day period I would be classified as a pattern day trader.
phjjr

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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6206 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 4:46 PM
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I am no expert. This is all new to me. But the way I understand it is that anyone to transact a total of 4 or more day trades in any 5 consecutive day period, must be reported by the broker as a day trader. And then once you are reported as a day trader you are bound by all the new day trading rules and limits. And the following is just my understanding. I have read that some daytraders might buy an sell stocks valued at 10 times or mores the value of their account within a day's time. Under the new rules you can only trade 4 times your previous days trading value in any one day. But that is just how I interpreted part of the new rules. And I could easily be wrong about any of this.
Eddie G

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Author: phjjr Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6208 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 4:52 PM
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Would anyone who shorts be also a day trader?
Would multiple accounts or brokers be a getaround?
phjjr

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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6209 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 5:05 PM
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Again this is all just my opinion from what I have read. If you short a stock and buy back to cover in the same day, that is considered 1 daytrade. If you total 4 or more daytrades in any consecutive 5 day period, you must be reported and listed by your broker as a daytrader. I have read that the $25,000 minimum would be a required minimum for each account in which you day trade. But I think if you have accounts at two or more different brokers, each would be separate for the total limit of 4 or more daytrades in an account. I'm not really sure if the same broker would keep a separate count so you could stay below the 4 daytrade limit in any consecutive 5 day period. So I would think the rules would go by each account. This way you would be able to day trade in an individual or joint account. And then you would be able to have a separate for long term holdings and separate accounts for IRA etc. But I am very new to all this. And I only have read a little about it on a couple boards.
Eddie G

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Author: stevieoh Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6220 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 5:50 PM
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But that is just how I interpreted part of the new rules. And I could easily be wrong about any of this.

Ya know, that makes some type of sense, but what is up with these people....do they come out of a comic book??

So far, I have read the stupid thing and don't completely understand it anymore than the next guy....why the heck don't they put it in a few simple sentences in PLAIN ENGLISH??

One thing is for sure....if we are still trading come Sept., we will find out-and thats probably the only time we will!


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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6224 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:09 PM
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But for someone like me that would be too late. I don't have $25,000. And somewhere else I read a message that said the $25,000 mimimum applied to cash accounts as well as margin accounts. And I don't short yet, but I thought you needed a margin account to short. I would have to limit any day trades I make to 3 or less in any consecutive 5 day period to avoid being listed as a daytrader. That's why I would like to know and understand the new rules. I wasn't even thinking of trying to turn $9000 into $25,000 by Sept.
Eddie G

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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: 6225 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:12 PM
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Here a link that might help.

http://www.tradecast.com/newsletter/html/nasd.html

If you need more imformation go the the bottom of the page and click for a PDF download.

RayR

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Author: Spagheddie Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6229 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:23 PM
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If you are good enough at making the trades, you just take Fridays and Mondays off as part of your extended weekend. You'll never trade 5 days in a row.

Ed

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6231 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:25 PM
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If you are good enough at making the trades, you just take Fridays and Mondays off as part of your extended weekend. You'll never trade 5 days in a row.

You mean everyone doesn't do this now? LOL!



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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6237 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:50 PM
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But the state I can't make 4 or more daytrades in any 5 consecutive day period. That means I can't make 1 daytrade a day for 4 days. I can't make 2 today and the 2 more 5 trading days later. I can't make 4 in one day. And I'm nowhere near as good as most of you. So until I can build up my $9000 into over $25,000 I wouldn't be permitted to make more than 3 daytrades within any 5 consecutive day time period.
Eddie G

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6240 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 6:56 PM
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But the state I can't make 4 or more daytrades in any 5 consecutive day period

I think you would just not be able to short or use margin...there is no limit if all the trades are long...if I understand it right...which I may not

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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6242 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 7:04 PM
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Hi Jean.
I haven't had a chance to look at the message someone gave here. But I had planned on making a couple daytrades throughout the week. Basically I'm not working. And I'm hoping I can make enough to keep my bills paid. I was thinking I would need to make about $2000 a month for bills. So I break that down into $100 a day on average. $500 a week on average. Then once I get going I will try for a little extra to build up my bankroll. And their definition for a daytrade is when you buy and sell the same security in the same day. And when you sell short and then buy to cover in the same day. So until I can build up to $25,000 I would only be permitted to try a total of 3 daytrades withing any consecutive 5 day period. I hope I'm explaining it so it is understandable. Like yesterday for example. I bought 200 SONS and then I sold it about an hour or two later. That would be 1 day trade.
Eddie G

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6243 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 7:09 PM
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Eddie, take some time to look thru the rules. I'm pretty sure they only pertain to accounts that use margin, which one has to do if they "borrow" stock from the broker to short. So as long as all your trades are regular...no shorts or margin. the # of trades doesn't trigger the 25,000 limit.

That's the way I read it anyway. I realize not being able to short could limit the money you make and that's difficult, but at least they aren't limiting all trades.

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Author: stevieoh Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6245 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 7:21 PM
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Eddie, take some time to look thru the rules. I'm pretty sure they only pertain to accounts that use margin, which one has to do if they "borrow" stock from the broker to short. So as long as all your trades are regular...no shorts or margin. the # of trades doesn't trigger the 25,000 limit.

That's the way I read it anyway. I realize not being able to short could limit the money you make and that's difficult, but at least they aren't limiting all trades.


Thats the way I see it too jean, in a nutshell, you can only go long with whatever cash you have - and it does not matter how many trades you make with your own money.

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Author: EddieGorniak Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6250 of 36696
Subject: Re: New margin rules explained Date: 6/27/2001 8:24 PM
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I doubt if I will be shorting anything. But I do use margin. Like I bought 200 Chkp for on 6-4-01 for 50.58. I only had $9000 in my account so I used margin. And today I sold the 200 CHKP for 52.50. Actually I was stopped out. I would have bought back in after it stopped droping and starting rising again. But that's when all my problems started today and I never took the time to watch the prices and buy it back.
Eddie G

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Author: Calabogie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6311 of 36696
Subject: Re: New margin rules explained Date: 6/28/2001 10:34 AM
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If you are good enough at making the trades, you just take Fridays and Mondays off as part of your extended weekend. You'll never trade 5 days in a row.

LOL Good one Ed!!

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