Since I need to avoid being tagged as a patterned daya trader, I need to understand how pre and post market trades are counted. If I open a position during day and set a limit order during after market and that order executes, is that considered a day trade?
Forum > Patterned Day Trading
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Posted March 14, 2008 (02:23AM)
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Posted March 14, 2008 (05:49AM)
Dear wavefreak58,
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Posted March 14, 2008 (06:08AM)
Okay. I think I've almost got it. This counts as a day trade: Open a position pre market. Hold through the day. Close it after market. What about these: Open a position pre-market, close on the next day's pre-market. (not a day trade?) Open a position after market, close it dunring the next day pre-market. (not a day trade?) Basically open and close on the same calendar day is ALWAYS a day trade regardles if pre or aftermarket. Open on one calendar day and close the next is NEVER a day trade. |
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Posted March 18, 2008 (02:24AM)
Risking being called a noob...Are there seperate rules to Day Trading? I mean, why would one want to avoid being "Tagged" a day trader?
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Posted March 18, 2008 (03:18AM)
Once tagged a day trader you need to keep a $25,000 margin account. If you don't maintain the margin you can have your your account locked.
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Posted March 19, 2008 (04:44AM)
I just traded email with customer service on this very question.
It seems the underlying principle is whether you hold the position (either long or short) overnight.
Buy in the morning - sell afternoon Selloff (previously held) shares in morning - buy back in afternoon (and hold) You get 4 day trades in a 5 day period before getting flagged. A flagged account (with less than $25k equity) is restricted to cash only. SEC rules allow a one-time waiver for special circumstances at the broker's discretion. I don't know how easy it is to get one from TK. |
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Posted March 22, 2008 (07:02AM)
See http://en.wikipedia.org/wiki/Pattern_day_trader for more in depth info.
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Posted March 23, 2008 (09:34AM)
So, let me get this straight, if you buy to open a long call in the morning, and the option skyrocketed and you wanted to take your profits that afternoon, that would be a day trade? Same as if you wanted to cut your losses if it plunged? But if you wait till markets open in the morning it is not considered a day trade? And also, if I understand this correctly, if I am correct in my thinking above, even if you did do this once or twice, it is ok, as long as you don't do it everyday in a 5 day period? Correct? Thanks |
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Posted March 27, 2008 (05:06AM)
You are correct. "Day Trade" pretty much describes it for what it is. If you hold no position overnight, it's a day trade.
You get 4 daytrades in any 5 day period without getting flagged. Once you've been flagged, the rules are different, though; ie; you get flagged, and are restricted for 30 (or is it 90?) days and don't do any day trades during that time. TK will drop the status. But after you've been flagged once, you can be flagged again for a single day trade, as you've already demonstrated the pattern previously. |
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Posted March 28, 2008 (05:21AM)
This seems pretty black and white to me: Don't buy 2 day round trip tickets (options or equities) in one week. If you do, have the cash to back up your account. This is straight from Tradeking.com in the faq's TRADEKING DOES NOT PROMOTE DAY-TRADING. If a customer engages in day trading, the following rules apply. Definition If you are designated as a Pattern Day Trading customer, you must maintain at least $25,000 in account equity in order to maintain day-trading privileges. If a call to bring the account equity to the minimum amount is issued for your account and the call is not met promptly.
Within these restrictions, you may still trade on margin (if you maintain at least $2,000 in account equity) and utilize buying power. |
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Posted April 11, 2008 (02:12PM)
the next business day being the market opening on the next day or 12:01am the next day? This question was asked earlier in the thread but I didn't see a response. If the position is opened anytime on monday can it be closed in anyway before the market opens again the next day without being considered a day trade? Also, I'm failing to understand how the firm is at risk if the account holder is only day-trading using available account equity and not trading on margin. Can someone break this down for me?
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Posted April 14, 2008 (10:05AM)
Hey everyone.... Let me see if I can give everyone here a clear and concise breakdown of Day Trading. 1. A day trade (round trip) will occur any time there is a buy and sell transaction of the same security in the same day. A day trade will also occur if you were to sell short and then buy to cover in the same day. I hope this explanation clears up this issue for everyone. Day trading rules can be confusing. If you want to make sure you do not get coded as a pattern day trader, just monitor your account to make sure you do not do more than three buys and sells (or sells and buys) of the same security, in the same day, in any rolling 5 business day period. If you ever have any questions about specific trades in your account, do not hesitate to call a representative at 877-495-5464. We will gladly help you with your account. Thanks for the great discussion! Chris Lebhar |
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Posted September 08, 2008 (08:41AM)
So in a non-margin account you can daytrade all that you want?
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Posted September 09, 2008 (02:08AM)
"Day trading rules and regulations will only apply to margin accounts." How about if you hold the stock for several weeks, sell on a monday morning, buy back that afternoon, hold til Wednesday, sell it Wednesday morning and buy it that afternoon, hold til Friday, then sell it Friday morning and buy Friday afternoon, holding for a week, with no margin being used? Is this construed as day tading? |
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Posted September 09, 2008 (05:26AM)
Day trading is buying followed by selling the same security in one day. Or selling short and then covering (buying back) in the same day.
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Posted September 09, 2008 (08:14AM)
So, whether or not margins are involved is, in fact, irrelevant to whether the activity is defined as day trading.
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Posted September 09, 2008 (09:20AM)
On my account-says that I can only buy/sell the same trade every three days. If I try otherwise it says that the funds are unsettled and then mentions some day-trading rules...is this normal? According to you guys-you can buy a stock on 1 day, and then sell on the next...my account won't let me do that and I have a margin account. I believe TradeKing only allows the same stock trade twice a week, once every 3 days.
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Posted September 16, 2008 (12:15AM)
I'm just getting started on TradeKing and I need to know if what Gamestock is saying is true. Can you _never_ place a day trade due to a settlement restriction? I'm hoping I'm not trapped in a tanking stock after I buy it. For some reason, my previous broker never had this restriction. I could buy and sell immediately with my cash account. |
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Posted September 16, 2008 (07:05AM)
Good Afternoon Everyone: Let me try to clear up some of the confusion you seem to be having regarding daytrading. In order to daytrade stocks you definitely need a margin account. Daytrading stock in a cash account is not feasible due to Regulation T, which requires a 3 day settlement period for stock trades. If you have a margin account with less then $25,000 you would need to limit your daytrades to 3 or less in any 5 business day period. If you were to exceed 3 daytrades as discussed earlier in this forum you would be coded a pattern daytrader, and would not be able to open and close a position on the same day unless you brought the account balance up to the $25,000 SEC minimum required to daytrade. Regards |
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Posted September 20, 2008 (04:52AM)
It'd be cool if they made an alert system that notifies us when we're only 1 round trip trade away from becoming a pattern daytrader
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