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Day trading"....FINRA tells the rules, seemingly, all

Customer Question
jumbled up! The broker...
Day trading"....FINRA tells the rules, seemingly, all jumbled up! The broker says, "it's complex"........??? Q...I have less than the $25K (req. to be able to sell "short")...once I have $25,000, IS (unlimited) day trading allowed (not only 3 every 5 days)? (Here's an aside...day 1, bought 400...day two, bought 100 twice, then sold the 400...two separate days, 400...NOT a day trade, but they made it so! "Complex"...I'd say so!)
Submitted: 2 years ago.Category: Finance
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Answered in 1 minute by:
2/19/2016
Financial Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 2 years ago
Jason M. Tyra, CPA
Jason M. Tyra, CPA, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 178
Experience: Principal at Jason M. Tyra, CPA, PLLC
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Hi Dave:

I'm not sure I understand your question?

The minimum capital requirement is $25k for a pattern day trader. What constitutes a "pattern" of day trading is up to your broker.

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Customer reply replied 2 years ago

The rules are, under $25K, no short selling and only 3 "round trips every 5 market days

Financial Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 2 years ago

Ok, what is your question?

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Customer reply replied 2 years ago

What happened? Where's my reply?

Financial Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 2 years ago

That was my reply- I don't see a question here?

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Customer reply replied 2 years ago

Exactly! I typed this, "Once I do have $25K in the account, can I trade more than 3 round trips every 5 days. This isn't that tough....

Financial Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 2 years ago

There isn't a FINRA rule against it. That is, you would meet the capital requirements for a pattern day trader, but your agreement with your broker would determine what you can do in your account.

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Customer reply replied 2 years ago

Obviously. I have killer credit, am allowed margin, etc., etc.. They WILL agree, I JUST need to know the RULE. I KNOW $25K would qualify....DOES IT MEAN MORE THAN THREE DAY TRADES/ROUND TRIPS ARE THEN ALLOWED (EVERY THREE DAYS?) What are you smoking?! Never mind, I don't think you KNOW......no reply necessary....

Financial Professional: Jason M. Tyra, CPA, Certified Public Accountant (CPA) replied 2 years ago

I just answered your question: There isn't a FINRA rule against what you're trying to do.

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Financial Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,898
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi - Different expert ... let me see if I can help to clarify. What you don't seem to understand is the difference between FINRA rules and the restrictions ANY B/D can put on trading activities (based on the risk they're willing to accept) ... this is a contract issue not a regulatory issue.

...

Said differently, the only FINRA reg here is the capital requirements for a pattern day trader.

...

What your brokerage platform will let you do is a contract issue AND the contract (your account agreement with them) can be written such that they have discretion to make changes any time they like.

...

You need to read your contract. (acoc**t agreement fine print).

...

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

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