Stock Trading and Other Things

Are there any penalties for day trading in Etrade or Scott Trade?

I do not have an acount with them and don't plan to - just curious.
I thought all brokerages allowed you to day trade in regular brokerage accounts.

I know my brokerage frowns upon day trading in retirement accounts since funds must settle before buying another stock. But in a regular brokerage ther are no rules.

Rules on day trading (in regular brokerage accounts - not retirement) from ScottTrade and Etrade will be helpful.

Public Comments

1. The only penalties I can think of is the brokerage fees you pay. I don't know of any day trader in the Forbes 200 rich list. Go figure.

2. FINRA rules say you need $25,000 balance to day trade. All brokers (US) are required to follow that rule.

As far as settlement. The law reads "up to 3 days". My Schwab & Scottrade accounts used 3 days in my IRA accounts (I had margin accounts with regular funds... so not effected by settlement).
I switched all my IRA accounts to another broker which has only "next day clearing" in IRA's. It's worked great for me.... Now 90% of my money is at this broker & my trading costs are 50% less. I day trade & swing trade in all my accounts.

Do your homework...... read;
http://webreprints.djreprints.com/2390280139740.pdf#view=fitV,100

3. You can day trade in either of those brokerage accounts as long as you have above $25,000 in the account and it is set up as a margin account. The reason for this is that FINRA has stated that if you execute more than 4 day trades in 5 consecutive days you will be labeled a pattern day trader. The main rule is that you have to have above the 25K in the margin account. Other than that There is no problems with day trading. This may help also http://www.daytrading.net/choosing-the-right-online-brokerage-firm/