Webull policy update regarding Pattern Day Trading.Submitted by Present_School_8754 t3_11dskic in wallstreetbets
LordPontificus t1_jaasry3 wrote
Reply to comment by Present_School_8754 in Webull policy update regarding Pattern Day Trading. by Present_School_8754
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
Joghobs t1_jab3g8n wrote
Jesus fuck. The gov is going the opposite direction we wanted them to on this
deliciousmonster t1_jabc7t9 wrote
Yeah, this a direct reaction to /r/wallstreetbets
Responsible_Sport575 t1_jacwcx8 wrote
BossHogOne 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.
logicallyillogical 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.
BullyBumble t1_jad3n7j wrote
Your example was always just 1 daytrade
logicallyillogical 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.
BullyBumble t1_jady62b wrote
Yeah that’s just not the rule tho.
Joghobs t1_jacx0do wrote
It's always been that way for me. At least on RH.
logicallyillogical t1_jaddrsq wrote
On etrade, that would have counted as 2 trades.
viperex t1_jack69p wrote
Here's my question: why do they make out PDT to be a bad thing? What are they trying to prevent?
BeerPizzaGaming 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.
conlius 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.
reercalium2 t1_jad2p1a wrote
Apparently it's something to do with unsettled funds
LordPontificus 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
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