Opciones day trading requirements


The rules permit a pattern day trader to trade up to four times the maintenance margin excess in the account as of the close of business of the previous day. If a pattern day trader exceeds the day-trading buying power limitation, the firm will issue a day-trading margin call to the pattern day trader. The pattern day trader will then have, at most, five business days to deposit funds to meet this day-trading margin call.

Until the margin call is met, the day-trading account will be restricted to day-trading buying power of only two times maintenance margin excess based on the customer's daily total trading commitment. If the day-trading margin call is not met by the fifth business day, the account will be further restricted to trading only on a cash available basis for 90 days or until the call is met.

In addition, the rules require that any funds used to meet the day-trading minimum equity requirement or to meet any day-trading margin calls remain in the pattern day trader's account for two business days following the close of business on any day when the deposit is required.

The rules also prohibit the use of cross-guarantees to meet any of the day-trading margin requirements. The primary purpose of the day-trading margin rules is to require that certain levels of equity be deposited and maintained in day-trading accounts, and that these levels be sufficient to support the risks associated with day-trading activities.

It was determined that the prior day-trading margin rules did not adequately address the risks inherent in certain patterns of day trading and had encouraged practices, such as the use of cross-guarantees, that did not require customers to demonstrate actual financial ability to engage in day trading. Most margin requirements are calculated based on a customer's securities positions at the end of the trading day.

A customer who only day trades does not have a security position at the end of the day upon which a margin calculation would otherwise result in a margin call. Nevertheless, the same customer has generated financial risk throughout the day. The day-trading margin rules address this risk by imposing a margin requirement for day trading that is calculated based on a day trader's largest open position in dollars during the day, rather than on his or her open positions at the end of the day.

The SEC received over comment letters in response to the publication of these rule changes. Day trading refers to buying then selling or selling short then buying the same security on the same day.

Just purchasing a security, without selling it later that same day, would not be considered a day trade. As with current margin rules, all short sales must be done in a margin account.

If you sell short and then buy to cover on the same day, it is considered a day trade. Your brokerage firm also may designate you as a pattern day trader if it knows or has a reasonable basis to believe that you are a pattern day trader. For example, if the firm provided day-trading training to you before opening your account, it could designate you as a pattern day trader.

Would I still be considered a pattern day trader if I engage in four or more day trades in one week, then refrain from day trading the next week? In general, once your account has been coded as a pattern day trader, the firm will continue to regard you as a pattern day trader even if you do not day trade for a five-day period.

This is because the firm will have a "reasonable belief" that you are a pattern day trader based on your prior trading activities. Forced sales of securities through a margin call count towards the day trading calculation. Under the rules of NYSE and Financial Industry Regulatory Authority , a trader who is deemed to be exhibiting a pattern of day trading is subject to the "Pattern Day Trader" rules and restrictions and is treated differently than a trader that holds positions overnight.

In order to day trade: Any legal restrictions on speculation permit to limit an activity that is negative with respect to moral-religious principles.

The rule provides day trading buying power to up to 4 times a pattern day trader's maintenance margin excess. The excess maintenance margin is the difference of the account equity and the margin requirement. If the account has a margin loan, the day trading buying power is equal to four times the difference of the account equity and the current margin requirement. If a client's day trading margin requirement is to be calculated based on the latter method, the brokerage must maintain adequate time and tick records documenting the sequence in which each day trade is completed.

Time and tick information provided by the customer is not acceptable. The Pattern Day Trading rule regulates the use of margin and is defined only for margin accounts. Cash accounts, by definition, do not borrow on margin, so day trading is subject to separate rules regarding Cash Accounts. Cash account holders may still engage in certain day trades, as long as the activity does not result in free riding , which is the sale of securities bought with unsettled funds.

An instance of free-riding will cause a cash account to be restricted for 90 days to purchasing securities with cash up front. During this day period, the investor must fully pay for any purchase on the date of the trade. Requirements for the entry of day trading orders by means of "pattern day trader" amendments: While all investments have some inherent level of risk, day trading is considered by the SEC to have significantly higher risk than buy and hold strategies.

The Securities and Exchange Commission SEC approved amendments to self-regulatory organization rules to address the intra-day risks associated with customers conducting day trading. The excess maintenance margin is the difference of the account equity and the margin requirement.

If the account has a margin loan, the day trading buying power is equal to four times the difference of the account equity and the current margin requirement.

If a client's day trading margin requirement is to be calculated based on the latter method, the brokerage must maintain adequate time and tick records documenting the sequence in which each day trade is completed.

Time and tick information provided by the customer is not acceptable. The Pattern Day Trading rule regulates the use of margin and is defined only for margin accounts. Cash accounts, by definition, do not borrow on margin, so day trading is subject to separate rules regarding Cash Accounts. Cash account holders may still engage in certain day trades, as long as the activity does not result in free riding , which is the sale of securities bought with unsettled funds.

An instance of free-riding will cause a cash account to be restricted for 90 days to purchasing securities with cash up front. During this day period, the investor must fully pay for any purchase on the date of the trade. Requirements for the entry of day trading orders by means of "pattern day trader" amendments: While all investments have some inherent level of risk, day trading is considered by the SEC to have significantly higher risk than buy and hold strategies.

The Securities and Exchange Commission SEC approved amendments to self-regulatory organization rules to address the intra-day risks associated with customers conducting day trading.

The rule amendments require that equity and maintenance margin be deposited and maintained in customer accounts that engage in a pattern of day trading in amounts sufficient to support the risks associated with such trading activities.

In other words, the SEC uses the account size of the trader as a measure of the sophistication of the trader. This rule essentially works to restrict less sophisticated traders from day trading by disabling the traders ability to continue to engage in day trading activities unless they have sufficient assets on deposit in the account.

On the other hand, some argue that it is problematic not because it is some sort of unfair over-regulatory attack on the "free market," but because it is a rule that shuts out the vast majority of the American public from taking advantage of an excellent way to grow wealth. Another argument made by opponents, is that the rule may, in some circumstances, increase a trader's risk.