quote:

---

Originally posted by bauer:
Hi all. I was flagged by freetrade as a pattern daytrader and now I have to have 25,000 in my account. Can my daytader status change if I don't buy and sell on the same day? I don't have $25,000 yet.

---

When I called Ameritrade I was told the average cash account is allowed 4 round trips a week. On the 5th round trip the account user is marked as a "Pattern Day-Trader". However, if the position is held overnight it doesnt qualify as a round trip (day trade).
--------- Example -----------
Mon.- BUY 44000 shares of WNMI @ .0225
SELL 44000 shares of WNMI @ .0345

*Thats one round trip, 3 more to go.

-----------------------------

Keep in mind, Im trading using a cash account on Ameritrade. I imagine your trading on margin using Freetrade but I think the "Pattern Day-Trader" rule is a universal rule among brokers. Hope this helps...

Please send an email to customer relations at Freetrade and ask them to verify this for you. They are very responsive.

I had Scottrade and Lowtrades, but Freetrade is the best. Hey, you can't beat the first 20 trades a month being FREE! The only thing I pay for is the Level II with the streamer for $14.99/month.

---------------------------

Here's a copy of their response from my email (with any personal information deleted).

Dear Valued Freetrade Client:

As long as you stick to your cash only, the pattern day trader flag should not be of concern to you. You will get flagged and a day trading equity call will be issued, but remaining within your cash will save your further consequences.

Sincerely,

Client Services
Freetrade by Ameritrade
Division of Ameritrade, Inc.

Original Message Follows:
------------------------
Hi,

Would you please answer a couple of questions about buying and selling a
stock on the same day?

My account is a margin account and I only use my own cash. I
will continue to do that. My question is about buying and selling the same
stock in my account. My understanding is that if I do 4 or more round-trip
trades within rolling 5 business days, I would be flagged a Day trader and
have to keep a minimum of $25,000 equity in my account. So does that mean that I must maintain $25,000 cash
if I intend to day trade or can I do that now as my accounts stands?

I was hoping I could day trade without changing anything, since I am using
my own money, but I wasn't sure.

I was just a little confused about this and wanted to check before I
actually tried to trade the same stock. If you have any other information
that you think I would be interested in, please feel free to give it to me.
I would rather find out now than later.

Thanks,

Raymond

-------------------------------------

Hope this helps someone!

quote:

---

Originally posted by bauer:
Hi all. I was flagged by freetrade as a pattern daytrader and now I have to have 25,000 in my account. Can my daytader status change if I don't buy and sell on the same day? I don't have $25,000 yet.

---

Freetrade will set up your new account as a margin account automatically. You can still use your own money, with the benefits of a margin account (like the big boys). Believe mew, I am still learning, so this was all news to me when I asked.

quote:

---

Originally posted by timberman:
How can you do that if you can't use your cash from a sell for three days? Just curious.

---

quote:

---

Originally posted by jrays:
Because it's a MARGIN account.

Freetrade will set up your new account as a margin account automatically. You can still use your own money, with the benefits of a margin account (like the big boys). Believe me, I am still learning, so this was all news to me when I asked.

[This message has been edited by jrays (edited April 09, 2004).]

---

Yes MARGIN IS RELEVANT. If you sign up with margin, you NEVER have to wait 3 days for your funds to settle. Just make sure that you NEVER trade more than what your cash account is. I.E., you don't actually use the margin (borrow from Freetrade)

quote:

---

Originally posted by BroBro:
I believe that while your funds have to settle you are able to borrow funds from the brokerage to trade with. This helps skip the 3 day period. Ameritrade doesnt charge interest on borrowed funds till after the third day. They also wont lend money to purchase OTC stocks or Pinksheets. So I think as long as your trading penny stocks (OTCBB,Pinksheets) the whole margin thing is irrelevant. I agree, divide your account up and trade wisely. --

---