Stock Trading and Other Things

Are there any regulations on day trading in the UK?

In the US a Pattern Day Trader must have $25000 and above in his margin balance for some stupid protective purpose. Are there any regulations on day trading/day traders in the UK as well? If there are can someone please tell me as detailed as possible?

Public Comments

1. I don't think there are any "regulations". all you have is the broker's own collateral requirements. After all a day trade is no different from a longer trade except, I suppose, everyone knows you are not going to take the shares up (or are you?).You will probably find the broker's application form includes questions as to the legnth of your investment, but this is usually a choice between short, med and long and doesn't specify the length of each category. Furthermore your financial details should show that you can afford the type of trading you are going to do. So, for example, if you stated you earned £20,000 pa had liquid assets of £500 and totla net worth of £20000 the broker would be at risk of FSA censure if he let you day trade £100,000 on 10% margin. Most brokers have a maximum amount for each trade (maybe £50k) or total outstanding trades (£100k) and might want 100% cash collateral. Put it this way it SHOULD be difficult to day trade beyond your means ( and that's what day trading usually is!). If you are worried about this why not trade CFDs? Having said that these "rules" are for your protection so be VERY careful.