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posted by n1 on Sunday May 14 2017, @11:08PM   Printer-friendly
from the SEC dept.

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.


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  • (Score: 0) by Anonymous Coward on Monday May 15 2017, @08:38AM (5 children)

    by Anonymous Coward on Monday May 15 2017, @08:38AM (#509854)

    What laws are being broken again?

    High Frequency Traders place huge volumes of orders which the HFTers have no intention of honoring because said orders are cancelled almost instantly. Placing such bad-faith orders are illegal.

  • (Score: 1) by khallow on Monday May 15 2017, @08:46AM (4 children)

    by khallow (3766) Subscriber Badge on Monday May 15 2017, @08:46AM (#509858) Journal

    High Frequency Traders place huge volumes of orders which the HFTers have no intention of honoring because said orders are cancelled almost instantly. Placing such bad-faith orders are illegal.

    I disagree. They have the intention to honor those orders for the brief period of time they're present. After all, the exchange isn't going to roll back trades that happen when some other HFT program snipes those orders, right?

    • (Score: 0) by Anonymous Coward on Monday May 15 2017, @08:54AM (3 children)

      by Anonymous Coward on Monday May 15 2017, @08:54AM (#509864)

      I disagree. [High Frequency Traders] have the intention to honor those orders for the brief period of time they're present.

      96.8% chance you are wrong. [qz.com] A 3.2% success rate (which includes ALL other market participants) is clear indication of blatant fraud in regard to bad faith trades.

      • (Score: 1) by khallow on Monday May 15 2017, @09:43AM (2 children)

        by khallow (3766) Subscriber Badge on Monday May 15 2017, @09:43AM (#509898) Journal

        A 3.2% success rate (which includes ALL other market participants) is clear indication of blatant fraud in regard to bad faith trades.

        That's much higher than I was expecting. So no, I think this proves my point. I'll also point out that there is no legal expectation that a bid will complete as a trade.

        • (Score: 0) by Anonymous Coward on Monday May 15 2017, @10:03AM (1 child)

          by Anonymous Coward on Monday May 15 2017, @10:03AM (#509911)

          A 3.2% success rate all-in on public offers is what is known as "false advertising", aka fraud. It's much higher than you were expecting because that 3.2% is the total of ALL successful trades, including ALL non-HFT market participants.

          • (Score: 1) by khallow on Monday May 15 2017, @11:50AM

            by khallow (3766) Subscriber Badge on Monday May 15 2017, @11:50AM (#509950) Journal

            A 3.2% success rate all-in on public offers is what is known as "false advertising", aka fraud.

            It's actually a 100% success rate. The bid after all happens. It just doesn't result in a trade most of the time.