Comments

You must log in or register to comment.

t1_jaajgbw wrote

Just switch to a cash account

110

t1_jaak1sr wrote

Question with a cash account don’t you have to wait for your trades to settle for cash to be available again to trade otherwise if you sell the assets before cash has settled it’s term “free riding” and are eligible for your account to be frozen by the gov?

30

t1_jab7rvb wrote

Cash account is easy. Tell your broker to set your account to only trade with settled funds.

Split your account in half.

Trading with unsettled funds is a good faith violation, and there's another violation if you then SELL that same opened position before the first buy transaction was settled. But if you set your account to reject orders if you don't have settled funds, you're good in most cases.

You can take as many trades as you have the cash to cover it.
So you can take one trade with your entire amount (half your account), or you could take 10 trades using 10% of your settled balance for that day. Either way, more ability to trade than with PDT restrictions - except no margin.

Margin = pdt restrictions
Cash = no PDT restrictions, but you have to use settled cash

Next year when the market shifts to T+1, you will be able to trade with your entire account each day.

25

t1_jabnd75 wrote

Good advice but I thought Options always been t+1 ?

5

t1_jacwams wrote

Cash account you can buy with unsettled funds but have to wait for it to clear before selling (T+1 options T+2 stocks or T+3 for deposits is general rule, check your broker to verify) otherwise you are at risk of a getting a GFV. I trade options with unsettled funds all the time, just have to be able to nut out holding through the day if you’re getting your ass handed to you. That’s the general rule, check with your specific broker rules for any nuances they include

2

t1_jaeinia wrote

You really can’t, they call it a good faith violation and if you read the terms of service it’s grounds for terminating your account if it’s a regular occurrence. While you can technically enter a position if it’s a situation where you plan to deposit money, you could get away with it. But selling instead of depositing funds is a secondary violation. These are banking laws, not broker laws.

0

t1_jaerg3e wrote

Well you’re wrong, it’s right in the first sentence. But I’ll give you benefit of the doubt because I wracked my brain over it for the first few months of day trading.

Good faith violation What is it? A good faith violation occurs when you buy a security and sell it before paying for the initial purchase in full with settled funds.

https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations

Consequences: If you incur 3 good faith violations in a 12-month period in a cash account, your brokerage firm will restrict your account. This means you will only be able to buy securities if you have sufficient settled cash in the account prior to placing a trade. This restriction will be effective for 90 calendar days.

2

t1_jaesl6o wrote

I have been using a cash account to day trade equities since 2016, before free commission. I'm not going to take this conversation personally because I know how complicated it is to get your head wrapped around GFVs.

Buying the security without having settled funds is a good faith violation.And per your own link - if you sell that position before you have deposited funds to cover that settlement, as in, if you attempt to simply sell the position and let that pay for the original purchase- you have a freeriding violation.

You cannot regularly commit GFVs in a cash account. You made it seem like you can but you can't, even if you hold it overnight - you have to deposit cash and let it settle to cover that initial purchase. These are not broker specific rules, these are banking regulations. It's basic accounting.

This might have a bit of leeway if you're trading cash-settled option. My experience is in equities.As you pointed out, 3 GFVs in a year and your account is restricted at a minimum. But many brokers will simply close your account - mostly because it shows you don't know what youre doing and youre making a mess of their books, making regulators look at them, etc.

Edit: TL;DR If you buy a position with unsettled funds, that is a good faith violation whether you hold it overnight or not. The purchase is a violation. Selling the position before you have added money to cover that settlement is another violation. You cannot do this regularly, as you implied.

1

t1_jaam82f wrote

Yeah, that is true. But if you have a sizable account, let’s say 5k+ and you’re taking “reasonable”-sized trades (I know it’s WSB but still). It’s hard to reach that limit to wait for more cash to be settled the next day.

14

OP t1_jaal0t3 wrote

I'm not worried about being flagged as a PDT. Just wanted to share with everyone a screenshot of the change being made.

A policy like this isn't something I support. I'll just wait until my current positions are concluded and swap brokerages. Any good recommendations I can look into?

7

t1_jaasry3 wrote

This is part of FINRA regulatory notice 21-13, it applies to every broker dealer and clearing firm. https://www.finra.org/rules-guidance/notices/21-13

26

t1_jab3g8n wrote

Jesus fuck. The gov is going the opposite direction we wanted them to on this

11

t1_jacaxdc wrote

Going in the opposite direction? This has been around for years. I can’t believe WeBull was letting people remove the flag every 90 days. A one time exception is the industry standard.

5

t1_jacvjbk wrote

No, it's actually better. If you scaled into a position, every buy and every sell is a trade. Now,

Example A: 

09:30 Buy 250 ABC 
09:31 Buy 250 ABC 
13:00 Sell 500 ABC 
The customer has executed one day trade. 

This is actually much better. Still is bullshit, but this is clarifying part of the PDT rule.

2

t1_jad3n7j wrote

Your example was always just 1 daytrade

2

t1_jadfdou wrote

Not with Etrade, that would have been 2 trades. I got suspended for 90 days because of that bullshit.

I moved to a cash account last year anyways and it's much better for day trades.

1

t1_jack69p wrote

Here's my question: why do they make out PDT to be a bad thing? What are they trying to prevent?

2

t1_jackx52 wrote

Highly leveraged bets which destabilize the markets. You know, the stuff the really big firms do daily that when they are margin called, they get bailed out by tax payers via different methods. Most directly and glaring example would have been in 2008.

7

t1_jado4mj wrote

Is that actually what they are trying to solve? Because PDT flag just forces you to keep more collateral in the account. In reality it seems they just don’t want people with small accounts day trading on margin.

1

t1_jad2p1a wrote

Apparently it's something to do with unsettled funds

1

t1_jadccgr wrote

Yes- if I had to guess it’s this. Believe it or not settlement risk is still a thing and we’re still on t+2. Day trading is inherently riskier and it adds stress to the settlement process so this was kind of a no brainer. It basically says you can day trade all you want but put up the money to prove you’re not a complete idiot. Makes sense

0

t1_jac4s01 wrote

Fidelity. Heck, and I know I know every one hates them, Robinhood has been on their game lately. Lol

2

t1_jaame6m wrote

That makes sense. Yeah, I couldn’t tell you off the top of my head. Is Robinhood implementing the same thing?

−1

t1_jacp87n wrote

robinhood has always had only 1 lifetime reset.

2

OP t1_jaevhjp wrote

Not true, I've been PDT flagged twice and have had it reset. (Primarily because I was swing trading 0 DTE spy options) Don't really regret the flags either because had I not flagged myself I would've nuked my acc by letting them expire.

1

t1_jaanwby wrote

How would that over ride their rules . Sucks for the degens trying to play the fomc meetings. CPI days will still be as their pre market.

−2

t1_jaapiaj wrote

It doesn’t really, but a bigger account that isn’t at 25k yet (let’s say 5-10k) can still day trade as much as needed with extra cash that’s settled as opposed to violating the 3 same day trade rule if you’re margin.

4

t1_jab219s wrote

Can you clarify this please. My understanding is 4 trades in a 5 business day period. If its the same stock you must wait two days. Otherwise there is a $25,000 minimum balance, (so more like $30,000), for no PDT flags. How can you "still day trade as much as needed"?

−2

t1_jab49tw wrote

Cash account.

−1

t1_jab52rp wrote

Is this only on certain platforms? I have TD ameritrade and a cash account and dont think they allow this.

−1

t1_jab65rk wrote

Not sure man. I know webull and Robinhood allow it. It's all I use for trading. Keep some cash in reserves and trade with the rest. Funds from settled trades on are ready next morning

5

t1_jab8pdk wrote

Webull will definitely let you do it. There’s an option in your settings, it does take like 5ish days for them to switch your account.

1

t1_jab30gi wrote

Heaven forbid the poors get rich.

97

t1_jabmyeq wrote

Uhm. I thought this was to help the poors? OH WAIT, I forgot the fucking SEC is a corrupt cesspool of shit.

25

t1_jacjqg1 wrote

I don't see how policies like this are allowed to even exist. Truly scummy. We can gamble our life savings on lotto tickets but we should have our money locked away and stolen for our own protection if we research a stock and make educated guesses as to when or why it may go up or down multiple times in a week. Like, ok, sure, it's bad to risk money but wouldn't it be safer to risk $100 instead of $25000? Why are we only allowed to take risks with extremely large sums of money that 70%+ of America will never see? It's vile and the people that make these laws should be promptly replaced with WallStreetBets degenerates and I'm not even joking.

4

t1_jackk6k wrote

Just trade cash only w/out margin. Problem solved.

0

t1_jad4evq wrote

This isn’t “problem solved” lol. Everyone saying “cash acct fix” just ignoring that you can’t turn your acct over more than 1x per day…

Eg a $100 acct can trade a $100 contract/share one time in a day.

TL;DR - cash acct is still very restrictive intraday, compared to PDT being removed.

4

t1_jackvwe wrote

As far as I can tell you get flagged as a pattern day trader with or without margin.... I use SoFi mostly nowadays and it sends me warnings even though I'm using my own money. Webull did it to me before even though I was definitely using my cash...

1

t1_jaak1u3 wrote

They restrict retail to protect retail. Isn't it wonderful.

59

t1_jaalml6 wrote

It’s actually a good thing because 80% of retail trade meme stocks and Yolo’s Tesla every week.

21

t1_jaaq2a7 wrote

Because we can’t afford to do more. The regulations are to keep kids out of the club. You gotta get lucky if you don’t have money, you just need time once you have it.

14

t1_jabdkp2 wrote

You can absolutely afford to do more. It’s called bankroll management and discipline. $50 a day and you’re above $25k in 2 years.

3

t1_jackae9 wrote

Yeah. My job forces me to hold for 30 days before i can sell. I hate them for it but deep down i know it has saved me a lot of money on shitty trades.

1

t1_jacl5y9 wrote

Thats different. That is restricted stock.

1

t1_jacliq6 wrote

No it's not. They just got tired of entry level hires spending their days trading stocks instead of doing their jobs, so now we all have a 30 day holding period for any stock you buy.

1

t1_jaam0kq wrote

No problem with pattern day lending unauthorized shares though

58

t1_jaapgxl wrote

Because fuck you poors, no more day trading for you. Going to have to bump up those numbers.

30

t1_jabanor wrote

For real, gotta embrace that caste system the US has. Keep the poore poor and they aren't as much of a.problem, ideally keep them on welfare aand addicted to opiods.

7

t1_jad4o8p wrote

Y’all act like every random asshole w/o PDT would get rich daytrading it’s lunacy

0

t1_jad50qj wrote

I'm Canadian and not subject to this lunacy, if I were I would be outraged. Even though my account is much much bigger.

1

t1_jaaj7ga wrote

This is an important update for anyone who uses Pattern Day Trader Resets on their account. Starting March 6th, 2023, you will only be able to request ONE PDT Reset for the lifetime of your account. This change is due to recent regulatory changes and updates at our clearing firm. Any previous PDT resets that have been completed will be forgiven on March 6th, and all accounts will be eligible for the single lifetime reset starting on that date.

10

t1_jabs4z6 wrote

Hello sir.

I'd like to return the AMC shares I purchased on January 24th. They did not do what I wanted them to do so I am claiming non-performance. In order to do this I would like to use my one lifetime Pattern Day Trader reset to reset the cash into my account. Of course, you can have the AMC shares for your trouble.

Yours in kindness.

LA

7

t1_jabr7mf wrote

Why are regular people restricted form day trading when machines literally trade millions of shares every second?

9

t1_jaakq8e wrote

How many resets did webull give before? Unlimited? Lol

8

t1_jacrodb wrote

If you break Pdt, it would reset every 90 days. So 4 times a year assuming you break pdt as soon as it resets.

2

t1_jac1urb wrote

PDT is nothing more than an elitist rule used a barrier to entry for the average person. They don't want everyday people scalping easy trades and making a couple hundred dollars a day

8

t1_jad4klq wrote

I mean “scalping” is no more than providing liquidity when someone is selling. And then selling when others are buying and supply is needed.

You’re a mini market maker.

3

t1_jab40ty wrote

Or start trading indexes using Futures. Problem solved.

6

t1_jabfk4w wrote

Anyone trading ES/NQ on a small account will blow up almost guaranteed. We all know this sub ain’t using micros

5

t1_jabgrym wrote

The margin requirement to trade 1 ES contract is about $15,000 with daily mark to market basis calculations.

3

t1_jadylyi wrote

So you trade the Emini or Micro contracts

1

t1_jaei6v2 wrote

The E-mini contracts (/ES) requires a $14,575.00 maintenance requirement per contract.

The Micro E-mini Contracts (/MES) requires a $1,457.50 maintenance requirement per contract.

Trading 1 MES contract is pointless as it's 1/10 of an E-mini /ES contract. A 100 point move in the ES would only make you $500 as the qty. x Tick for the /MES is only $1.25.

1

t1_jaeyinw wrote

What's your point that dangerous margin levels

1

t1_jaeyoy4 wrote

The point is that somebody who cannot afford to fund a $25,000 account to avoid daytrading rules cannot afford to fund a marked to market daily $15,000 futures account.

1

t1_jaeytkx wrote

Trade the damn micro are you not reading?

1

t1_jaez5qz wrote

If you would read my comment you would understand that trading the micros is absolutely pointless because the per tick move is $1.25. It’s not worth the trading fees to make next to nothing on price movement.

0

t1_jaezfb2 wrote

That is absolutely the dumbest comment ever.

−1

t1_jaezxhb wrote

This is a gambling sub Reddit. No one here is going to trade 1 MES contract to make only $500 on a 100 point move in the ES. You’re fucking regarded.

Edit: Good, your dumb ass got banned.

0

t1_jacqypx wrote

https://www.finra.org/rules-guidance/notices/21-13

They are about 2 years late with this policy change.

The outrage at this thing that every other brokerage has already done over a year ago is regarded. WeBull might be the largest brokerage that took this long to make this change. None of you have any idea what you’re doing. Excellent.

4

t1_jab7vje wrote

Markets are shifting to a T+1 settlement next May.
This should be less and less of an issue, hopefully. It used to be t+3 when I started.

2

t1_jac4ntf wrote

Wait a minute? Technical analysis is profitable. Here I thought you were all just drawing with crayons.

2

t1_jac8reo wrote

I have no idea what the post meant but after reading all this comments it’s safe for me to assume I’m coolin cause I don’t play with funds until they are settled.

2

t1_jaaj6tc wrote

User Report
Total Submissions 2 First Seen In WSB 7 months ago
Total Comments 4 Previous Best DD
Account Age 2 years [^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.) [^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
1

t1_jacd3ca wrote

time is money. PDT takes the fake daily value they inflate. to make the greedy piles seem bigger in the virtual world of investors "holding". This allows for bigger loans and money grabs..

exponential gain, like a 2 dollar tesla.

it's almost like interest rates.

give me your money, i'll collect on it, get mad at you when you take it back. killing pdt is very convenient for my royal kingdom.

time is the value.

or if they give you money, charge you because they are elite.

But if I give money, I am not allowed to charge...or trade or deal whenever I want.

meanwhile..it's ALL our money allowing them to be so special.img

1

t1_jad86w5 wrote

Because I am not from the US, could someone explain to me what pattern day trading exactly is?

1

t1_jaf0390 wrote

Lol just once in one’s life time ? I bet RH will come out w a better PDT policy update

1

t1_jaf0r9h wrote

Break the rule and see if they keep to their words...like pen test

1

t1_jaakd7l wrote

Someone lend me 24000 to add to my current 1000. There was a petition on change dot org to cancel this PDT rule. So it would appear it didn't go anywhere?

−1

t1_jac7x9r wrote

I love webull and Robin Hood and all these fake little ticky tack brokers. Reminds me off the offshore gambling sites from 2008 era…

You just send money in knowing your never getting it back

−1

t1_jacoiwf wrote

If you can't afford a 25K you shouldn't be day trade anyways

−1