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I pulled this from the US Code. I'm not sure whether Day Traders would fit into the "dealers in securities" category, but they would more than likely incurr these losses in the "ordinary course of business. Can anyone clarify this.

United States Code
Sec. 1091. Loss from wash sales of stock or securities

(a) Disallowance of loss deduction
In the case of any loss claimed to have been sustained from any
sale or other disposition of shares of stock or securities where it
appears that, within a period beginning 30 days before the date of
such sale or disposition and ending 30 days after such date, the
taxpayer has acquired (by purchase or by an exchange on which the
entire amount of gain or loss was recognized by law), or has
entered into a contract or option so to acquire, substantially
identical stock or securities, then no deduction shall be allowed
under section 165 unless the taxpayer is a dealer in stock or
securities and the loss is sustained in a transaction made in the
ordinary course of such business. For purposes of this section,
the term 'stock or securities' shall, except as provided in
regulations, include contracts or options to acquire or sell stock
or securities.

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