I'm a little confused/worried about the day trading rules and how to avoid being labeled as a day trader.
Am I supposed to avoid 4 transactions with the same stock in 5 days?
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I'm a little confused/worried about the day trading rules and how to avoid being labeled as a day trader.
Am I supposed to avoid 4 transactions with the same stock in 5 days?
http://www.daytradingworld.com/day_trading_rules.html
"Beginning September 28, 2001 margin rules and requirements for one group of traders changed dramatically. The new rules apply to traders categorized as Pattern Day Traders (PDTs) who are defined as traders who make 4 or more day trades within a 5 day period, unless his/her day-trading activities do not exceed 6% of his/her total trading activity for that time period. Thus, if you have only 4 daytrades in a 5 day period but have done more than 67 trades during that time, then less than 6% or the trades were day trades and hence do not categorize a trader as a PDT..."
So thinking about the day trade rules again. What happens if you sell, for example TZA but then buy TWM? Not the same EFT even though investing int he same idea. Is it still counted as a day trade?
Lady
I would guess no. It would not be a day trade.
Yes Lady, I'm still confused.
Example: I Buy SLV on Mon, and I sell it on Tue, does this count?
Example: I Buy 500 shares of SLV on Mon and sell 100 shares on MON, Tue, WED, THU, & FRI. Does this count against me?
Example: I buy 500 shares of SLV on Monday and sell 100 shares every hour. Have I now excedded my limit?
I hate math, espically work problems...:huh:
The logical answer is that if you both buy and sell the exact same ETF in the same trading day, then it counts. But 'logical' may not be the same as the 'correct' answer in this case. :unsure:
Lady
I would have to say no.Quote:
Originally Posted by JTH
I would guess this counts as one day trade.Quote:
Originally Posted by JTH
I was on the phone this weekend with my USAA broker because they have been over charging me on my trades.
Anyways, he told me that if you buy one stock and sell it multiple times that day, then each one of those trades counts against you.
Does this jive?
I haven't found the answer to that specific question, but here are the rules per FINRA (Financial Industry Regulatory Authority)...
http://www.finra.org/Investors/Smart...rading/p005906
More on the day-trade rule. I called my Scottrade broker to ask about linking my and my spouse's accounts, and asked about day-trade rules while I had him on the phone. He says the day-trade rule applies to margin accounts. But if you're trading an IRA account, which I am, then it is a cash account and isn't subject to that rule. All the cash account has to keep in mind is the settled/unsettled funds issue.
Lady
Thank you Lady, that makes me feel better and gives me one less thing to worry about. :)Quote:
Originally Posted by XL-entLady