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If the government really wanted to protect us from ourselves they would limit gambling, which costs poor people a lot and is known to result in unfavorable odds, and they would discontinue the lottery. Instead because the lottery and gambling make the government and big institutions money they are legal. Restricting pattern day trading is, likewise, an attempt to give those with money more leverage over those without money. This law directly discriminates against those without money and it was passed by those with money. The government has essentially passed two sets of laws, one for the rich and one for the poor.
These laws were undemocratically passed by the rich for the rich under the false pretense of protecting the poor. Such is a hallmark of an aristocracy. No nation should have a different set of laws for the rich than for the poor.
The entire Wikipedia article, especially all the criticisms, are worth reading.
FINRA (formerly National Association of Securities Dealers, Inc. or NASD) rule applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin accounts, but not to cash accounts. A pattern day trader is subject to special rules. The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account.
[...] The SEC believes that people whose account equity is less than $25,000 may represent less-sophisticated traders, who may be less able to handle the losses that may be associated with day trades.
(Score: 1) by khallow on Monday May 15 2017, @05:25AM (9 children)
The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account.
To be honest, you're not going to get the time of day from a broker for less than $25,000, much less open a margin account. It's a practical restriction, not just an arbitrary SEC rule. And to be honest, $25k is not much of a restriction either. If you can't scrape that amount together from the usual approaches of saving and investing, then you don't have the chops to day trade either.
If you want a real, rich-people-only rule consider the "accredited investor" [ecfr.gov] . This is the minimum level of investor needed in order to greatly reduce the SEC regulation you are exposed to. For example, you would need to have a net worth of at least a million dollars or consecutive income of $200k for several years, including the present one, in order to avoid a lot of SEC nannying.
(Score: 0) by Anonymous Coward on Monday May 15 2017, @06:12AM (8 children)
To be honest, you're not going to get the time of day from a broker for less than $25,000, much less open a margin account. It's a practical restriction, not just an arbitrary SEC rule. And to be honest, $25k is not much of a restriction either. If you can't scrape that amount together from the usual approaches of saving and investing, then you don't have the chops to day trade either.
It's not the government business to make such restrictions, effectively coddling people.
(Score: 1) by khallow on Monday May 15 2017, @08:20AM (7 children)
It's not the government business to make such restrictions, effectively coddling people.
But if the government is going to make such pointless restrictions, wouldn't it be better to set the thresholds for those levels so low as to be ineffective? At this point, the only real cost to the restrictions is the bureaucracy of maintaining the paperwork.
(Score: 0) by Anonymous Coward on Monday May 15 2017, @08:31AM (6 children)
Give me two percent of your net productivity. No? Then I'll get my friends and take it at gunpoint.
If you object, then you defeat your own argument. There is no justification to adding pointless, needless drains on productivity.
(Score: 1) by khallow on Monday May 15 2017, @08:37AM (5 children)
Give me two percent of your net productivity. No? Then I'll get my friends and take it at gunpoint.
If you object, then you defeat your own argument. There is no justification to adding pointless, needless drains on productivity.
Except of course to immunize against even worse, even more needless drains on productivity.
(Score: 0) by Anonymous Coward on Monday May 15 2017, @08:41AM (4 children)
Very well. All your time off work is hereby cancelled. Report to my labor farm to begin your first sixteen hour shift of your new 116 hour work week.
(Score: 1) by khallow on Monday May 15 2017, @08:51AM (3 children)
(Score: 0) by Anonymous Coward on Monday May 15 2017, @08:59AM (2 children)
The point is you and your undermining of your own claims.
It's sad, really.
(Score: 1) by khallow on Monday May 15 2017, @09:45AM (1 child)
(Score: 0) by Anonymous Coward on Monday May 15 2017, @10:06AM
Oh - so you called it such because you were trapped trying to lie?