Stock Trading and Other Things

Pattern day trading in margin account? -  Stock Trading and Other Things
Translate to English Translate to German Translate to Spanish Translate to French Translate to Russian Translate to Dutch Translate to Italian Translate to Portuguese Translate to Japanese Translate to Korean Translate to Chinese Translate to Greek

Pattern day trading in margin account?

OK! Here's my sticky question. I have talked to may people, and I feel like I am getting it although it is confusing, but I want to make sure.

Facts: I have a margin account in a brokerage firm. It is under $25,000. I want to day trade stocks and options (several trades a day). I know my account will be tagged with 'pattern day trader'.

Conclusion: I can still day trade with buying power equal to my available cash, without violating any rules?

Is my conclusion correct? Please someone knowledgeable clears it for me. Thanks.
It's amazing everybody's wrong in the reply. I just talked to my broker in depth, and he and his boss all confirmed my conclusion. The fact is

"Any margin account under $25,000 can be day traded with buying power equal to available cash. It is treated like a cash only margin account. Period."

Public Comments

1. If you're under $25,000.00 you violate the FINRA "Patern Day Trading Rule". Margin or no margin (Margin only helps with regard to settlement.... period).

This was set up so people that know little about the market don't wipe out their life savings in a week.
Most people don't know that it takes the average person 3-5 years to learn day trading. Worse yet.... many people start after only reading one or two books on trading. 95% won't get past the first year.... most don't survive day trading more than a few months.

Read 6-10 of these books (to start);
http://joefahmy.com/2010/03/17/recommended-reading-list-2/
http://www.chrisperruna.com/2010/01/10/2010-stock-reading-list/

2. Don't daytrade.

You will blow your account straight to hell.

Buy gold, silver, and USO and WAIT.

You can thank me later.

3. You cannot day trade. If you day trade you will be required to deposit funds to increase your account to $25,000 or you will be suspended from all trading for 90 days. Call the margin manager at your brokerage. He is much more pleasant to talk with before you violate any rules.