Excerpt from: Day trading newsletter Issue No. 008
Can I daytrade only in a cash account ?
From: P&R
Can I daytrade only in a cash account? I can't quite make the
$25,000 and I don't want a pattern daytrader margin call!
Thanks,
P&R
~~~Christopher's Response~~~
P&R,
You sure can, you just need to obey the 3 day clearing
rule imposed by most (if not all) Brokerage Firms.
The clearing rule requires a three business day
clearing period after a stock sale is initiated before
the funds from that sale are made available once again
in your account. You also need to remember that you will
not be able to initiate short positions however because
shorting is only allowed with margin accounts.
If you would like to review the pattern daytrading rules
we have outlined them for everyone on the site:
Day Trading Rules
Another option to keep in mind is futures trading. Futures
day trading is not restricted by the pattern daytrader rules,
taxes are a lot easier to deal with and initial deposit
requirements and margin maintenance levels are much more
reasonable. In fact I would recommend that anyone with
any interest in trading for a living take a close, long
look at the e-mini's.
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