NEWBIES BOARD

[Garyst]

Nightly Topic: Tonight is Day Trading rules. Day Trading became very popular back in the early 2000's in the "Dot com" era. Those were the days when on any given day one could invest in a "IPO" (Initial Public Offering) and were guaranteed 1-300% easily daily. Many got rich and sold the same day. Day Trading caused a ton of volatility in prices as everyone was doing it so the SEC put limits on it.

For the regular people like you and it limits us to how many DT's we can have in a 5 day trading perios and that is three. The 5 day period only covers days that the market is open. A DT is defined as buying a security one day and selling it the same day. Let say you didn one on Monday, one on Tuesday and one on Wednesday. The next opportunity to do another one is the following Tuesday after the previous Monday one falls off. One can do 3 all in one day if they choose but then you would have to wait 5 trading days before you would have your three available again.

One thing that can put you in the trick bag is this. If you buy in the AM and sell in the afternoon but only 1/2 your oder goes thru and you change your order to get the remaining shares sold that will count as two DT's as they were two separate Orders.

If you are flagged at a "PTD" (Pattern Day Trader) you will have your account restricted to a cash only account for 90 days which means you can trade but just have to wait the 3 day settlement period. Your trading Co will also give you the option of funding your account with $25k and then you can freely DT. Most people just opt to take the 90 day restriction.

Tomorrow nights topic is whan to buy a Penny stock and what to look for when buying.