Day Trading Buying Power
The rule increases day trading buying power to up to 4 times a pattern day trader's maintenance margin excess. For example, if a trader has $100,000 worth of equities, the leverage ratio is 4:1 meaning that it can buy securities of up to $400,000.
For day trading in equity securities, the day trading margin requirement shall be 25% of either:
- the cost of all day trades made during the day; or
- the highest open position during the day.
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.
Read more about this topic: Pattern Day Trader
Famous quotes containing the words day, trading, buying and/or power:
“The novel can’t compete with cars, the movies, television, and liquor. A guy who’s had a good feed and tanked up on good wine gives his old lady a kiss after supper and his day is over. Finished.”
—Louis-Ferdinand Céline (1894–1961)
“His farm was “grounds,” and not a farm at all;
His house among the local sheds and shanties
Rose like a factor’s at a trading station.”
—Robert Frost (1874–1963)
“I don’t see the good of a country gentleman. Buying and selling;Mthat’s what the world has to go by.”
—Anthony Trollope (1815–1882)
“One of the surest evidences of an elevated taste is the power of enjoying works of impassioned terrorism, in poetry, and painting. The man who can look at impassioned subjects of terror with a feeling of exultation may be certain he has an elevated taste.”
—Benjamin Haydon (1786–1846)