posted
HI everyone...i have been using freetrade for a while and i just got this message:
REMINDER: Your account has been flagged as a Pattern Day Trading Account. As such, your account has been issued Day Trading Buying Power. Please refer to Commonly Asked Questions to review the differences between Buying Power and Day Trading Buying Power.
Margin Call
Day Trading Minimum Equity Call -19,197.99
am i screw? or can i just dismiss it? any help or sugestions appreciated. thank you.
posted
I had the same message on ameritrade and this is what I was told by their customer service: as long as I do not use the margin just ignore it. Always use your own money to buy and you'll be fine.
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quote:Originally posted by fastrunner: I had the same message on ameritrade and this is what I was told by their customer service: as long as I do not use the margin just ignore it. Always use your own money to buy and you'll be fine.
thanks a lot, it may me feel betteerr now. hopefully the same applyes for freetrade
[This message has been edited by wildhog (edited March 03, 2004).]
quote:Originally posted by wildhog: HI everyone...i have been using freetrade for a while and i just got this message:
REMINDER: Your account has been flagged as a Pattern Day Trading Account. As such, your account has been issued Day Trading Buying Power. Please refer to Commonly Asked Questions to review the differences between Buying Power and Day Trading Buying Power.
Margin Call
Day Trading Minimum Equity Call -19,197.99
am i screw? or can i just dismiss it? any help or sugestions appreciated. thank you.
PATTERN DAY TRADER HAS TO KEEP AT BALANCED OFC 25,00O IN ACCOUNT WITH SECURITIES AND CASH. THERE ARE WAYS AROUND THIS. THE MARKET IS ABOUT TO OPEN. I CAN EXPLAIN THIS TO YOU WHEN I HAVE TIME LATER THIS EVENING.
DO NOT MEAN TO BLOW YOU OFF AND WILL GET WITH YOU LATER. IN THE MEANTIME DO NOT BUY AND WELL THE SAME SECURTIY IN THE SAME DAY. THEY WILL BAN YOUR ACCOUNT. I KNOW THIS AS IT HAPPENED TO ME. THIS IS VERY SERIOUS. POST YOUR E-MAIL AND I HAVE INFORMATION TO SEND TO YOU. AGAIN--DO NOT TAKE THIS LIGHTLY AND DO NOT MAKE TRADES OF BUYS AND SELLS IN THE SAME DAY TILL YOU READ THIS INFO.
------------------ DIANA
[This message has been edited by realityinc21 (edited March 03, 2004).]
posted
fastrunner, if I only use MY cash balance, but, I buy and sell a stock in the same day, will I be okay?? Lady Di mentioned above that you should not get in and out of a stock in the same day. I am curious to know if you do this on a regular basis with your Ameritrade account.
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posted
After what Diana said, I am now not sure if the customer service at Ameritrade is right or not. Wait for Diana's explanation. I have not sold and bought the same security in the same day for a while though. That's why I am in the red.
quote:Originally posted by jiggin: fastrunner, if I only use MY cash balance, but, I buy and sell a stock in the same day, will I be okay?? Lady Di mentioned above that you should not get in and out of a stock in the same day. I am curious to know if you do this on a regular basis with your Ameritrade account.
posted
An SEC designation applying to any individual who buys and sells a particular security in the same trading day at least four times in a five-day period, and for whom same-day trades make up at least 6% of the trader's activity during that period. Pattern day traders are subject to special rules.
NASD Rule 2520
The SEC has approved amendments to NASD Rule 2520 regarding Day Trading that are effective September 28, 2001. A description of the rule changes is summarized below.
"Pattern day traders" are defined as those customers who day trade four or more times within five business days, provided that the number of day trades exceeds 6% of the customers total trading activity for the five-day period.
Customers designated as "pattern day traders" are subject to a minimum equity requirement of $25,000. The required minimum equity must be in the account prior to any day-trading activity. Accounts with less than $25,000 will not have day trading buying power.
Day-trading buying power is limited to four (4) times maintenance margin excess. This is calculated based on the customer's account position as of the close of business of the previous day.
Day-trading buying power will be reduced to two (2) times maintenance margin excess for those customers that have outstanding day-trading margin calls. In addition, the "time and tick" method of calculating the requirement will not be used. Therefore the requirement will be based on the total cost of a customer's day trades during the day.
If a day-trading call is not met by depositing funds within five (5) business days, the account will be restricted to trading only on a cash-available basis for ninety (90) days or until the call is met.
Deposited funds used to meet the day-trading minimum equity requirement or to meet a day-trading margin call must remain in the customer's account for two (2) business days following the close of business on any day when the deposit is required.
The sale of an existing position from the previous day is considered a liquidation and the subsequent repurchase of that security as the establishment of a new position not subject to the rules affecting day trades.
Could you please send the same to me? biayum@pacbell.net. Thanks.
Trini
quote:Originally posted by realityinc21: PATTERN DAY TRADER HAS TO KEEP AT BALANCED OFC 25,00O IN ACCOUNT WITH SECURITIES AND CASH. THERE ARE WAYS AROUND THIS. THE MARKET IS ABOUT TO OPEN. I CAN EXPLAIN THIS TO YOU WHEN I HAVE TIME LATER THIS EVENING.
DO NOT MEAN TO BLOW YOU OFF AND WILL GET WITH YOU LATER. IN THE MEANTIME DO NOT BUY AND WELL THE SAME SECURTIY IN THE SAME DAY. THEY WILL BAN YOUR ACCOUNT. I KNOW THIS AS IT HAPPENED TO ME. THIS IS VERY SERIOUS. POST YOUR E-MAIL AND I HAVE INFORMATION TO SEND TO YOU. AGAIN--DO NOT TAKE THIS LIGHTLY AND DO NOT MAKE TRADES OF BUYS AND SELLS IN THE SAME DAY TILL YOU READ THIS INFO.
posted
Diana--you thought you were finshed raising the KIDS--LOL---i can't help here--i don't do margin and i follow the pattern day trade rule very precisely--so i have no clue---------sorrry---
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posted
you will be fine as long as you only trade with the money in the "CASH BALANCE" column. if you spend more than you have in the "CASH BALANCE" column, you are spending more money than you have and will be dipping into the margin. in other words, you will be using their money without realizing it because its automatic. as long as you are staying within your cash limits, you have nothing to worry about and can ignore the margin calls. hope this helps.
ps. if you did dip into the margin, contact them and tell them you didnt mean to.. i believe they will drop the margin call the first time it happens, just make sure not to do it again.
posted
hey JR thanks... cabbage told me the same thing. i am not using the margin so i think iam ok...
quote:Originally posted by jr: you will be fine as long as you only trade with the money in the "CASH BALANCE" column. if you spend more than you have in the "CASH BALANCE" column, you are spending more money than you have and will be dipping into the margin. in other words, you will be using their money without realizing it because its automatic. as long as you are staying within your cash limits, you have nothing to worry about and can ignore the margin calls. hope this helps.
ps. if you did dip into the margin, contact them and tell them you didnt mean to.. i believe they will drop the margin call the first time it happens, just make sure not to do it again.
posted
Could someone let me know if the following example is okay. Lets say I have $5200 in my cash balance column. I make 5 round trip trades of $1000 each. At the end of the day, my cash balance now reads $5500 from the profits that I took on todays 5 trades. Tomorrow, can I use the entire $5500 that is in my cash balance column without getting a margin call? Also, I do have a margin account, so my cash doesn't have to settle for 3 days. Anyone? Diana?
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posted
If its a margin accnt yes,funds are clear to use next day....If its cash only it should take 3 days before it shows as available...Don't know about Ameritrade but do 5 daytrades in 1 day elsewhere and you'll get a PDT notice and need to keep the account balance above 25k
{edit} Pays to check with your particular broker because some will treat matters differantly to others.
[This message has been edited by tuna (edited March 04, 2004).]
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