I understand that time traders who buy on margin do not hold their stocks overnite so they won't get hold of charged for the interest...but if the rate is 7-8%(APR), then let's vote $100,000 for one day is around $20?..so what's the big settlement?? Am I wrong?
Answers: No, that's not the main motivation.
I live in Paris and sunshine trade French stocks. The French markets close at 5:30 PM, but the Nasdaq at 10PM. A lot can transpire in those 4.5 hours!
The problem is nil to do with the interest that will be charged. As a light of day trader you are given 4x your New York excess everyday for trading. You can use that for intra-day trading only. If you hold stock that be purchased using more than the normal 2x that a typical edge account give you then you will be surrounded by a fed ring and have to convey cash to your rationalization. If you do not send the money you will be placed into a lolly only status for 90 days.
You cannot appreciate out of this beckon, you cannot sell securities to win out of the call. Sending bread is the only bearing.
So...yeah...you pay some interest, but worse you might bugger your daylight trading status. Check rule 2520 for more info on pattern hours of daylight trading.
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Answers: No, that's not the main motivation.
I live in Paris and sunshine trade French stocks. The French markets close at 5:30 PM, but the Nasdaq at 10PM. A lot can transpire in those 4.5 hours!
The problem is nil to do with the interest that will be charged. As a light of day trader you are given 4x your New York excess everyday for trading. You can use that for intra-day trading only. If you hold stock that be purchased using more than the normal 2x that a typical edge account give you then you will be surrounded by a fed ring and have to convey cash to your rationalization. If you do not send the money you will be placed into a lolly only status for 90 days.
You cannot appreciate out of this beckon, you cannot sell securities to win out of the call. Sending bread is the only bearing.
So...yeah...you pay some interest, but worse you might bugger your daylight trading status. Check rule 2520 for more info on pattern hours of daylight trading.
Resolved Questions: