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viperex t1_jack69p wrote

Reply to comment by LordPontificus in Webull policy update regarding Pattern Day Trading. by Present_School_8754

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

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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.

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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.

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reercalium2 t1_jad2p1a wrote

Apparently it's something to do with unsettled funds

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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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