darthmaul re: daytrading rules...
I've been thru this whole discussion w/one of my small Ameritrade accts and here is the deal and I'm going on the assumption that you do not have $25,000 or more in your account:
1. The world does not come to an end if you make more than 3 daytrades/wk.
2. You will be flagged as a "pattern daytrader" that creates a new class of trader status for your account.
3. You will be assigned a "day trading buying power" (DTBP) line on your account balances that is 2 times your available funds.
4. You will be able to daytrade off that amount of money until it is depleted to zero. The amount of DTBP is NOT replenished intraday when you sell a day traded holding, BUT YOUR CASH WILL BE REPLENISHED INTRA DAY.
5. Your day trading buying power will be replenished overnight to a full tank again
6. If you exceed your day trading buying power intraday you will be issued a "day trading power call" and you'll be responsible to ADD CASH to your account w/in 5 days (just selling equities to cover is not enough) to cover the marginal excesses (margin plays a part here, but I won't go into it for this)
7. At the end of the day, you can STILL use your balance of normal buying power for an overnight hold.
8. you can sell short w/DTBP but the account WILL NOT REPLENISH intra day (no clue why)
9. Big note here: IF YOU ARE TRADING WITH LESS THAN YOUR AVAILABLE CASH POSITION IN YOUR ACCOUNT, YOU CAN MAKE UNLIMITED NUMBERS OF ROUND TRIP DAY TRADES WITH THE CASH REPLENISHING ON EACH ROUND TRIP REGARDLESS OF YOUR DTBP.
10. If you have over $25K in your account, you will be issued a DTBP of 4 times your available funds and your account will 100% replenish to original 4 times position after each round trip.
These are my best interpretations Ameritrade rules as I've been explained. Check with your own broker as to what applies and for accuracy of above.
DISCLAIMER: DO NOT RUN TOTALLY ON THIS INFORMATION. THIS IS A PLACE TO START AN INTELLIGENT DISCUSSION W/YOUR OWN BROKER.
GLGT
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