Day Trader and Marginal Account Questions & Answers - Stock Market Forum, Penny Stocks, FOREX, NASDAQ, AMEX, NYSE, Live Chat

Pillzilla · #1 08-01-2007, 02:24 PM

Is it permissable to day trade in a 401K account if your balance is above 25K?

Example, say I want to play QID during this volatile market within my 401k Self-directed brokerage...can I buy and sell same day?

Pillzilla · #2 08-01-2007, 04:29 PM

anyone know?

**Aufan 1983** · #3 08-01-2007, 04:32 PM

I have no clue sorry..... but I would think hard about daytrading with my retirement unless you are dang good at it.

Pillzilla · #4 08-01-2007, 05:03 PM

Very small portion allocated toward speculation <5%.

**Aufan 1983** · #5 08-01-2007, 05:06 PM

Quote:

Originally Posted by Pillzilla

Very small portion allocated toward speculation <5%.

ohhh....lol Someone might can answer but if not send a pm to tntrader. He is pretty sharp on those type things

Evil-Eye · #6 08-01-2007, 06:10 PM

Quote:

Originally Posted by Pillzilla

Is it permissable to day trade in a 401K account if your balance is above 25K?

Example, say I want to play QID during this volatile market within my 401k Self-directed brokerage...can I buy and sell same day?

The only things I know of are the unsettled funds rule and the pattern day trader rule that would be of concern in your case. I do not trade in a tax deferred account so there may be other things of concern that I don't know about.

bugeyebug · #7 08-03-2007, 01:24 PM

I am new to trading, but am excited about learning and trying my hand at it. I've purchased the CD and am studying everything I can get my hands on.

That said, I have a question: I've read on one of the forums that there is a limit to the number of trades I can make in a certain period of time. Something like one round trip per four trading days or similar. What's the scoop on this limitation? Or is there one?

Cheers,
Bug

lovemoney · #8 08-04-2007, 03:52 PM

Sounds like that might have something to do with the unsettled funds and free ride rule of online brokers. You can buy a stock and sell it the same day and then buy another that same day, but you cannot sell that second stock you bought until the funds from the first sell are settled 3 days later.

Also, you can sign up for a margin agreement, which will allow you to trade without the 3 day business hold on sales proceeds. A consideration with this approach, however, is if you do 4 roundtrips (a buy and a sell of the same security on the same day) in a five-day period you will be considered a pattern daytrader. This will require you to maintain $25,000.00 minimum equity.

Fisher · #9 08-15-2007, 08:13 PM

Hello, first I would like to introduce myself and say thanks for all of the great info that is on this site. I have been a lurker for a while now (also on MM site) and I really appreciate all of the advice and hard work that is obviously put into this forum.

Now, I have a question about daytrading...I have a Scottrade account and I e-mailed them and what I came away with is I can sell one position...buy another but I have to wait until settlement (3 days) until I re-sell that position. Do I have to have the 25K in my account in order to buy and sell a security in the same day? It appears that with Scottrade I do...are all brokerages the same on this...is it a federal mandate?

Basically, it would be nice to take advantage of the daily price fluctuations that happen even with great stocks. I mostly trade small and mid caps.

Thanks in advance for any responses.

**Aufan 1983** · #10 08-15-2007, 10:35 PM

Quote:

Originally Posted by Fisher

Hello, first I would like to introduce myself and say thanks for all of the great info that is on this site. I have been a lurker for a while now (also on MM site) and I really appreciate all of the advice and hard work that is obviously put into this forum.

Now, I have a question about daytrading...I have a Scottrade account and I e-mailed them and what I came away with is I can sell one position...buy another but I have to wait until settlement (3 days) until I re-sell that position. Do I have to have the 25K in my account in order to buy and sell a security in the same day? It appears that with Scottrade I do...are all brokerages the same on this...is it a federal mandate?

Basically, it would be nice to take advantage of the daily price fluctuations that happen even with great stocks. I mostly trade small and mid caps.

Thanks in advance for any responses.

If you are considered a pattern day trader which is 3 or more roundtrips in any 5 business days you are required to maintain 25,000.00.

This can get really hard to explain but here is a try.

If you buy with unsettled funds you must wait the 3 days until the buy settles before you can sell the stock.

You are correct in that you can sell and buy something else the same day but then you are facing the settlement time.

To avoid this you can set up a margin account with a 2500.00 minimum but you would need to hold the stock overnight.