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Hello All,

I have a/some question(s) about PDT and the rules/laws that govern it.

I have the following 3 accounts at Vanguard
Roth IRA
Traditional IRA
Brokerage account

Each has over $25,000 in it.

At Vanguard, they don't allow PDT (it's "against our investing philosophy").
If I sell a stock in the morning, and then buy it back the same day, they stipulate that I can't resell that stock until the "Settlement Funds" from the initial sale are in your account (2 days after the initial sale), or I'll be dinged for "Free Riding" (because I'll have sold a stock I didn't technically own yet...even though the ledger says otherwise).

My understanding is that if I have a Margin account, and a PDT designation (at other brokerages, of course), that I can buy and sell, the same stock, as many times as I want, and won't get dinged for "Free-Riding", or anything else.

If I switch to a brokerage that allows PDT, and I apply for a margin account designation for each, are there ANY SEC rules/regs/laws that would prevent me from trading the same stock, in the same account, multiple times a day, up to and over the value of the assets in any of my accounts?

In other words, say my ROTH has $50,000 in it, and I have a "Margin" designation on the account (I know that I can't trade on margin in either of my IRA's because there is no way to add funds to cover any margin calls, but I was told by an Interactive Broker rep, that you just have to have more than $25,000 in the IRA, and a "Margin" designation to allow you to PDT). So, I have $50k in the account, that satisfies the $25,000 minimum,...and I have the "Margin" designation, that allows me to PDT....

So, my question is....
Is there ANYTHING (laws/rules/regulations, etc.), that would prevent me from:

Selling TSLA at 10am...
Buying TSLA at 10:30am...

Selling TSLA at 11am...
Buying TSLA at 11:30am...

Selling TSLA at 12pm...
Buying TSLA at 12:30pm...

etc., etc,. all day long?

Next question...kind of lengthy, but there is a reason I'm giving you the preface of a Margin Brokerage account.
At Vanguard, if you have a Margin Brokerage account, they will allow you 4X Leverage...however, you cannot trade more than your Daily Margin/Leverage, if I have $50k in my account, I can trade up to $200k, on Margin, within a single day without being restricted.

Having said that, when I called Interactive Brokers, I asked if there was limit to the amount of trades (either quantity of trades, or monetary value), of a single stock (or my portfolio), in a single day.
The rep said that there wasn' long as I had the $25,000 Margin Account Minimum, and the PDT designation, I could buy and sell till my hearts content, every day.
I pressed further and said, "So, if I have $50,000 in assets in my ROTH IRA, even though I'm not trading on Margin, I can buy and sell up to and over my $50,000 in assets?"
His reply, and I'm paraphrasing, is that as long as I have the $25,000 Margin Minimum in the ROTH IRA account, I could trade whatever monetary amount I wanted within a single day (of course, using only my stock), but he said I could log $100k, $1M, $2M in trades in a single day if I wanted to.

Is this correct?

Is there anything he didn't tell me, or that I'm not aware of that would prevent me from doing this?

I'm just trying to make sure that there isn't some Rule/Law/Regulation that everybody but me knows about, and if I decide to trade a stock multiple times a day, in the same account, that I'm going to unknowingly run afoul of said Rule/Law/Regulation, and then be "In Trouble" (ie: account suspension, fines, etc.).

Thanks for any and all advice.

Best regards,

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You gotta distinguish between idiosyncratic, broker-specific rules --like VG's aversion to "day-trading"-- and the industry-wide PDT rules.

Vanguard is a sh*tty broker through whom to be trying to execute trades. A friend had an account there and was complaining about the fills he was getting. I told him about my own positive experiences at IB. He followed up and set up an account with them and then did test trades at both firms. Consistently, his fills at Vanguard were inferior to those at IB. That was a couple years back, and YMMV, as they say.

IB isn't the easiest platform to deal with. Plus, there are data fees that have to be paid. So a better broker is TD Ameritrade, and its DOM is a lot easier to trade off of. But here's a real surprise. Even stodgy old Schwab is a good place to execute. I've done a hundred trades with them in the last three weeks on some pretty illiquid stuff and have gotten good fills, even with market orders.

Suggestion: Every broker has strengths and weaknesses. Leave at VG the accounts you aren't having problems with and transfer to a better broker the account you want to use to do fast round trips.

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