Stock Trading and Other Things

what is the consequences if i been day trading and i din't have 25K in my account?

will i get penalize or band from trading by my broker? will my broker warn me? i used to have 100K in the account but took it out last year and now im just starting to learn swing or position trading and i made 3 transaction last week (bought 500 stocks of ABC then sold it the next day and made profit and bought 100 same stock the same day. will i be mark as day trader?

Public Comments

1. Most firms will freeze your account. You will receive a notice from them telling you that you are not in compliance, and if you continue they will close your account.

However you haven't actually violated the rule yet. The definition of a pattern day trader is: "The term "pattern day-trader" is defined as any customer who executes four or more day trades within five business days, provided the number of day-trades is more than 6% of the total trades in the account during that period."

2. for the people who knows day trading there will not be any loss.

anyhow one should get prepared for unexpected events - as the stock counters at times plays havoc. they cannot play beyond one quarter. you should play day trading with surplus money and you should invest only 25% of your capacity to swng along with waves and to trade according to the trend,

if you are short of money - you will lose everything - you will be barred from trading and many more consequences.

3. Yes you will get a warning at which time you can say, Oh I am sorry, I didn't realize I had done that. That works once.

First you broker will tell you that you are acting as a "pattern day trader" and you need to fund the account.

After you warning if you continue trading, your margin account will be frozen for 90 days. Your account may be liquidated with to many violations.

4. Technically, a daytrade is buying, and then selling a stock on the same day. You can sell a stock, and then buy it back again on the same day, and that is not considered a daytrade.

5. Based on your question, you are not day trading.

A day trade means the position is opened and closed the same day. You buy and sell (or short and cover) the same day.

In the 3 transactions you made:
You bought one day, sold the next day. that is not a day trade.
You bought the same stock, the day you sold. You closed one position and opened a new position. That is not a day trade.

There are no limitations on the type of trading you are doing. But if you think you might start making actual "day trades" read Financegals answer for the definition of a "pattern day trader."