day trading buying power?
Tuesday, 31 August 2010
hello fellow stock traders
first of all, let me start by saying that thanks whomever is providing me with some answers
currently i am interested in opening a new stock account with any broker with 30 thousand dollar with the sole purpose of day trading with it.
from my past trading experiences, i have never actually paid attention to the effect of closing positions intraday and how that relates to the buying power in an account. so here are my questions to you guys
1. with normal margin, i will be granted overall overnight buying power of 60k for the day, is that correct?
2. if i open a position on a security valuing 30 thousand, then close that position, for the sake of this example, got exactly 30 thousand back, what would my buying power be on a normal margin account. 30k? or 60k?
i.e. will my buying power be replenished as i close positions intraday.
3. if i sign up with a broker, it will only be 5 days before i will be labeled as a pattern day trader, with the responsibility of keeping my account above 25 thousand at all times. with 30 thousand dollars, i will be granted 120 thousand in buying power, same as the example above, and just clarify things, if i open an position for 30 thousand and then close that position for 30 thousand again, will my buying power be back up to 120 thousand again, or is it at 90 thousand.
does opening and closing positions intraday affect day trading buying power ?
additionally, if you could include some winning and losing examples in securities in regard to the buying power and its restoration through out the day, that would be really helpful.
i guess the bottom line question is: is the 4x day trading buying power the maximum value of initial security investment on the day, or is it the maximum position that can be opened together and go back up as positions are closed throughout the day, so that i will be allowed to trade in other securities if opportunity present itself.
sorry about the long email, but i just want to be sure of everything before opening an account, the sec rule is not very clear on the matter on how day trading buying power works. just the minimum 25 thousand deposit.
hopefully i will hear some great answers from the stock veterans out there.
hey, 30 k is not much in the world of stock, but everybody got start from somewhere
No. 1 — August 31st, 2010 at 11:14 pm
Hi there.
What I found is that brokerage firms use a quite complicated formula to calculate your trading power every day. This becomes more complicated if you trade options (which many traders do to ’stretch’ their capital). Speak to a really good platform like think or swim and they can answer your question precisely based on your examples above.
Also professionalstocktraderlive.com run an excellent service teaching you how to day trade and become a consistantly profitable trader. They charge less than the cost of a tank of gas a month and they are for so honest and for real that they post the results of their day trading lessons every day on their website. Ask any one else for their results and see if you get them! I joined them 6 months ago and havent looked back.
Good luck to you, and wish you the best!
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