See, now it's starting to make more sense. My example today would be a violation, i made the two trades that left me at the negative amount today with a sell on the stocks for tomorrow. Even though the amount is less than I started with, the funds wouldnt have cleared until wednesday,so tomorrows sale, and today's second buy would be a violation. If I had a funded margin account, I wouldnt have to wait for the funds to clear? But technichally the two transactions would be on margin?
Is this funds clearing and all that what caused that kid to kill himself? Accounting was just taking place but he thought he was a quarter million in the hole? So effectively if a person wants to make multiple day trades he needs to have the number of trades made times the trade amount in his account? For ease of math, if a guy wants to buy 1000 dollars worth of stock and sell it 4 times in a day, he needs to have 4000 dollars cleared in the account ahead of time? And if he wants to do it every day he needs 8000 dollars cleared in the account when he starts? On Mon, Apr 12, 2021, 4:25 PM Forrest Christian (List Account) < li...@packetflux.com> wrote: > Let me see if I can help: > > There are two types of accounts. Margin and Non-Margin. > > A margin account lets you borrow money to trade. This one comes with all > sorts of odd restrictions. For example, if you do 5 day trades in a week, > they want you to have the $25K in equity in that account. This is a > government rule. > > A non-margin account is also a cash account. There are no day-trading > restrictions, in that you can day-trade as much as you want. However, > because you don't have credit, you have to pay close attention to your > settled balance. The oversimplification of this is as follows: When you > sell a stock, the funds aren't really available to you for 2 days > afterwards, just like when you deposit a check in your bank. You can > generally buy another stock with the funds from this sale, but if you > *sell* that second stock before the funds from the first sale clear, you're > going to get into trouble. Fidelity has a good writeup on this. > https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations > > I have only one brokerage account with margin enabled. It's at TD > Ameritrade. I will occasionally do a day trade with thinkorswim where I > have a good feeling that the market is going to head in one direction or > another. Sometimes a few days a week. But usually only a few days a > month, if even that often. I've moved enough stock over there from > another brokerage account where I'm over the $25K equity so I don't have to > worry about the day trading rules. I like knowing I'm not going to get > in trouble for breaking some rule, but I don't like having the ability to > invest more than I have (other than to avoid settlement issues). > > Everything else doesn't have margin enabled. And I like it that way. > > A lot of people miss that there is a difference between investing and > trading. Investing is what you do when you want to retire at some point > in the future. Generally the best strategy for most people who are doing > this is to just buy some index funds. I like VTI in particular, with some > VXUS mixed in. Or the mutual fund equivalents in my vanguard accounts. > > Trading is more like poker. You're buying individual stocks and hoping > they win. Like poker, a good player can do well, but most players are > lucky to break even. So when I trade or day trade, it is with funds I > never expect to see again... and then am pleasantly surprised if I don't > lose too much. > > On Mon, Apr 12, 2021 at 2:11 PM Steve Jones <thatoneguyst...@gmail.com> > wrote: > >> So if you dont trade on margin, you still have to have a margin account >> with 25000? The more im learning and reading the more I understand why >> certain people believe there needs to be more regulation. The crazy amount >> of risk, aside from just putting your money up, margin, short sale, etc. I >> dont have any interest in doing much of that, in regular life I try to be a >> cash guy (though economy and paycheck doesnt allow that) but I wouldnt ever >> consider taking a load out to go to the casino. >> >> I see the risk aversion, I switched my paper account balance to the >> actual amount id be willing to risk, and suddenly I wasnt as adventuresome, >> I assume that would amplify when actual money goes in. I dont mind my risk >> on the limited long term stocks, I think theyll perform well, Smith and >> Wesson in particular. >> >> I have my paper account sitting at -1900 for the day with pending sells >> for tomorrow that I think will hit the expectations at 9 tomorrow. Is that >> considered day trading since part of the cash was from a purchase and sell >> today? >> >> this webull place says i can day trade with 100 dollars, so if i was to >> toy with that, its just math to extrapolate to real gains or losses? Im >> just finding it hard to believe theres a way to get better than casino >> winnings without committing a crime >> >> On Mon, Apr 12, 2021 at 2:55 PM Tyson Burris <t...@franklinisp.net> wrote: >> >>> Steve- >>> >>> >>> >>> I didn’t read the whole email chain so I maybe blowing smoke here. >>> >>> >>> >>> Margin is borrowed money based on a set value of a security. You cannot >>> Margin trade most penny stocks. >>> >>> >>> >>> Margin trading is high risk / high reward. You MUST be careful. A >>> stock that is traded on Margin and rapidly decreases its value you can >>> cause you to be in Margin CALL or even owe the broker if not careful. >>> Buying Power tends to be Margin. >>> >>> >>> >>> According to SEC regulations, a day trader is one who trades / flips >>> five or more times in a trading period. If you are flagged as a day trader >>> you must maintain 25K or more. Holding a security overnight and not >>> bouncing in and out of it prevents this from happening. I believe if your >>> account is flagged, you can wait 60-90 days and request the flag be >>> removed. (assuming you don’t day trade anymore) >>> >>> >>> >>> Those who don’t hold a stock for a year or longer will pay a much, much >>> larger capital gains tax then those who do. Short vs. Long term. >>> >>> >>> >>> Examples of pros and cons… >>> >>> I took a 30K+ loss many years ago when earnings came out and the stock >>> tanked. I had the stock purchased on Margin. Had I not, the loss would >>> have been so much less. I was forced into a Margin call and had to take >>> the large LOSS. This is an example of Margin trading that caused a large >>> loss. >>> >>> >>> >>> During Covid, I invested with Margin into a stock I knew would do well. >>> At the peak, 3 million was made. So this became a perfect case in which >>> Margin trading worked really to my benefit. I had to hold this stock for a >>> year or longer to reduce the capital gain tax. >>> >>> >>> >>> >>> >>> *Tyson Burris, President* >>> *Internet Communications Inc.* >>> *739 Commerce Dr.* >>> *Franklin, IN 46131* >>> >>> *Office #* *317-738-0320 * >>> *Cell/Direct #* *317-412-1540 * >>> *Online: **www.surfici.net* <http://www.surfici.net> >>> >>> >>> >>> [image: ICI] >>> >>> *What can ICI do for you?* >>> >>> >>> *Broadband Wireless - PtP/PtMP Solutions - Mesh Wifi/Hotzones - IP >>> Cameras - Fiber - Towers - Infrastructure.* >>> >>> *CONFIDENTIALITY NOTICE: This e-mail is intended for the* >>> *addressee shown. It contains information that is* >>> *confidential and protected from disclosure. Any review,* >>> *dissemination or use of this transmission or its contents by* >>> *unauthorized organizations or individuals is strictly* >>> *prohibited.* >>> >>> >>> >>> *From:* AF <af-boun...@af.afmug.com> *On Behalf Of * Steve Jones >>> *Sent:* Monday, April 12, 2021 1:02 PM >>> *To:* AnimalFarm Microwave Users Group <af@af.afmug.com> >>> *Subject:* Re: [AFMUG] OT: penny stocks >>> >>> >>> >>> I just dont get it >>> >>> I reset my account to specific cash amount. I dont understand buying >>> power, seems like credit. >>> >>> The one im toying with is RGBP, if someone can look and tell me what >>> thinkorswim is letting me do that the real world wouldnt allow >>> >>> >>> >>> On Mon, Apr 12, 2021 at 11:47 AM Carl Peterson < >>> cpeter...@portnetworks.com> wrote: >>> >>> It is also pretty easy to look like a genius when markets are going up >>> an idiot on the way down. Markets have been going up and up and up for a >>> long long time now. At some point that party will end. >>> >>> >>> >>> On Mon, Apr 12, 2021 at 11:44 AM Carl Peterson < >>> cpeter...@portnetworks.com> wrote: >>> >>> What is often missing from play accounts is often liquidity. They >>> generally assume you can make any trade at wherever the current "price" >>> is. If you are trading VWAPY that might generally be true. Perhaps not >>> for VWAGY. Often not when trending $rando penny stock. >>> >>> >>> >>> On Mon, Apr 12, 2021 at 11:12 AM Steve Jones <thatoneguyst...@gmail.com> >>> wrote: >>> >>> im simply not grasping this >>> >>> on the paper trading site, ive made 7500 this morning on 10k i was >>> playing with. thats 11,000 dollars in 2 days of playing around with >>> essentially 10,000 up front. There has to be more to this. >>> >>> i see on my schwab account if i make more than 4 same day trades in a >>> week i get flagged as a day trader and need to have 25,000 in my account or >>> i get a margin call. I dont know what that means, im not buying on margin, >>> it would be cash. >>> >>> >>> >>> assuming that I had actually had 10,000 in my real account, would I >>> really have profited 11,000 in 2 days on 5 trades? (there was some math >>> mistakes made, I made the same size purchase each time, forgetting that the >>> increased price lowered the number of stocks i could get for 10k, but >>> technically the sale would have put enough in to cover the difference) >>> >>> >>> >>> On Sat, Apr 10, 2021 at 4:08 PM Caleb Knauer <cknauer.li...@gmail.com> >>> wrote: >>> >>> It works great, right until it doesn't. If it was that easy then we'd >>> all be wolf of wallstreet. >>> >>> On Fri, Apr 9, 2021 at 10:13 PM Steve Jones <thatoneguyst...@gmail.com> >>> wrote: >>> > >>> > So I've been dicking around with the market, trivial amount, 5 shares >>> per stock. If I had put a lot in Tesco would have done me well. >>> > >>> > I have 100 shares of this penny stock, it's a gold backed >>> cryptocurrency, I watch it bounce a lot throug the day and its followed the >>> same trend for its couple months existence. >>> > >>> > So I set up a paper account and was dicking today with another penny >>> stock. Set buy and sell limits with about 10,000 in the play money. It made >>> 4k in 2 rounds. It's just a couple pennies it fluctuates but at 500,000 >>> shares that adds up. >>> > >>> > I told the wife and of course she wants me to cash in something and >>> play with real money. >>> > >>> > I'm more inclined to see how the play money performs, I have some >>> limits on the crypto stock that we will see what happens on monday morning. >>> > >>> > I'm thinking to myself there has to be a catch. If it was that simple, >>> everybody would be doing it. >>> > >>> > You guys who mess around probably went through a time where you tried >>> that kind of trading, and none of you talk about it now, so I assume the >>> catch is pretty straight forward. >>> > >>> > I was looking at my IRA, it's done pretty good at 17 percent. But just >>> taking 10k of it and playing with this at 1 percent per trading day, that >>> would be another 27k annually. >>> > >>> > I do see why day traders need low latency though, but with limits I >>> dont see it has a lot of impact. >>> > >>> > What's to stop a guy from spending an hour or 2 every morning with a >>> relatively small amount in the big scheme of things like 10k trading to 1 >>> percent or better and then going to work? 100 bucks a day or more doesnt >>> seem terrible for an hour. >>> > >>> > >>> > -- >>> > AF mailing list >>> > AF@af.afmug.com >>> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> >>> >>> >>> >>> >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >>> -- >>> AF mailing list >>> AF@af.afmug.com >>> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >>> >> -- >> AF mailing list >> AF@af.afmug.com >> http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> > > > -- > - Forrest > -- > AF mailing list > AF@af.afmug.com > http://af.afmug.com/mailman/listinfo/af_af.afmug.com >
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