I just have a feeling that they brought in the rule to stop the masses trading on bulk, same as the stupid can't short on a down tick rule. I think they brought that in to stop traders shorting the market into a crash. But there is probably a more logical reason for it.
Mr. Charts
Legendary member
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Fact:
The rules were brought in because the US legislature pressured the SEC in response to media criticism of under capitalised day traders causing undue volatility. There was growing public unease about over-stressed, under-capitalised day traders burning out and becoming violent. There were indeed incidents of that nature.
My source is a personal friend whose brother is a US senator involved in the lobbying.
My opinion: Typical knee jerk politicking producing stupid rules.
The rules were brought in because the US legislature pressured the SEC in response to media criticism of under capitalised day traders causing undue volatility. There was growing public unease about over-stressed, under-capitalised day traders burning out and becoming violent. There were indeed incidents of that nature.
My source is a personal friend whose brother is a US senator involved in the lobbying.
My opinion: Typical knee jerk politicking producing stupid rules.
I have just opened an account with IB but do not have as much as the K25 mentioned on here. Do the limitations of 3 trades in any 5 days apply across the board or is it just relevent to stocks. I trade the e-mini SP but was not aware that I could be restricted to 3 round trips in any 5 days. Advice needed. Many thanks in advance
Peter
Peter
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The PDT (pattern day trader) rules apply just to stocks - futures such as the emini S&P are exempt, so you can trade away merrily without worrying!
That's the reason they're so very popular. :cheesy:
That's the reason they're so very popular. :cheesy:
Just to clarify for my own understanding:
1. Only futures are exempt from PDT considerations.
2. So any opening AND closing activities on the same day and same symbol are considered to count. Stocks AND options.
3. If I open 16 positions stocks and close 16 positions options no PDT counting is involved.
4. If I buy 600 shrs IBM, sell same day 200 shrs and write options on the remaining 400 PDT count is 1.
5. If I sell or buy 16 different positions (Symbols) and due to US opening 3 get stopped out at 9 pm - thats it, ´finish finito, cash injection to gain > 25K acctn size or stopping of new openings for 90 days. Only closing transactions permitted. Or you sell options, as premium will be added to your accnt instantly - even if it will definately be a loss-trade (like DIM).
So: any 2 opposite trades in the same symbol on the same day with stocks or options will be counted.
Correct??
Regards
Hittfeld
1. Only futures are exempt from PDT considerations.
2. So any opening AND closing activities on the same day and same symbol are considered to count. Stocks AND options.
3. If I open 16 positions stocks and close 16 positions options no PDT counting is involved.
4. If I buy 600 shrs IBM, sell same day 200 shrs and write options on the remaining 400 PDT count is 1.
5. If I sell or buy 16 different positions (Symbols) and due to US opening 3 get stopped out at 9 pm - thats it, ´finish finito, cash injection to gain > 25K acctn size or stopping of new openings for 90 days. Only closing transactions permitted. Or you sell options, as premium will be added to your accnt instantly - even if it will definately be a loss-trade (like DIM).
So: any 2 opposite trades in the same symbol on the same day with stocks or options will be counted.
Correct??
Regards
Hittfeld
