Comments on: How to Circumvent Pattern Day Trader Restrictions

by: Carl

Sun, 19 Jul 2009 22:03:49 +0000

Hi, Everyone,
If you trade using a cash account but not a margin account, will you be considered as a pattern day trader?

Thanks,

Carl

by: Andy H

Mon, 11 May 2009 12:17:30 +0000

Actually, if you buy the same stock 3 times in the same day, then sell all the shares the same day, that would constitute 3 day trades. On the other hand, if you bought the stock today then sold in in 3 pieces today, that would be only 1 day trade.

I’ve found that the best way to avoid making a day trade if you have to get out (say, because the market goes against you) is to hedge with an inverse ETF overnight. For example, say you bought XLF (the financial sector SPDR ETF) today, but the market goes south. If you buy a half-position in SKF (2x inverse financials) before the close, you total exposure to further decline is neutralized. You can sell both positions the next morning (or whenever you chose) without encountering another day trade. This strategy works best in margin accounts.

by: scottrader

Mon, 20 Apr 2009 16:02:13 +0000

Just called my broker at Scottrade. PDT applies to options as well

by: Seb

Tue, 14 Apr 2009 15:52:00 +0000

Along those same lines as Anthony, what happens if I buy 500 shares of something, and I want to shed off a few shares, say 10, on the same day, leaving me with 490.

Will that constitute a round trip?

by: Anthony

Sat, 04 Apr 2009 17:39:05 +0000

From Wikipedia:

Round Trip

If you buy the same stock, at 3 different times in the same day, and close all of that same stock in one trade, that will be considered 1 “round-trip”. Selling again will trigger another round trip, and another sell will trigger a third. The next round trip in the next 4 business days will freeze your account (you can only close existing positions) for 90 days, or until you get $25,000 cash into your account, whichever comes first. This also applies to options.

Question… “close all of that same stock in one trade, that will be considered 1 ’round-trip’.”…

So what would happen if I bought 500 shares of each of 4 different companies at market open and sold 499 of each position later that same day? Does that constitute a “pattern day trader” because I still have 1 share of each company and didn’t close out any of my positions?

by: Gregory

Mon, 30 Mar 2009 21:34:43 +0000

Can someone further clarify the PDT rule for me please? Is it to say that you can’t buy and sell the SAME stock 4 times in 5 days or you can’t buy and sell ANY stock 4 times in 5 days? Could I get to my limit by selling one stock 4 times and then move on to something else? Thanks.

by: Jon

Mon, 09 Mar 2009 18:28:34 +0000

Does anyone know of any other brokers like Allience or what surch criteria I should be use to find such brokers. I would like to compare.

by: Andy H

Thu, 26 Feb 2009 17:17:57 +0000

Bob, you can do that forever. The pattern daytrader rule applies ONLY for a stock bought and sold in the same day, with the big exception that you can sell a stock carried over from the previous day, then buy it back the same day.

by: bob g

Tue, 06 Jan 2009 15:18:28 +0000

if I bought a stock one day and sold it the next day, then bought it back that day and sold it the next,then bought it back and sold it the next and so on and so on, whould I be considered a pattern day trader> I bought a stock yesterday,sold it today. Now I want to but it today again. How many times can I do that.Thanks.Bob

by: Babak

Fri, 15 Jun 2007 01:35:57 +0000

Handy,
as far as I know options are excluded from PDT rules. The best source to confirm is your broker.