Question regarding day trade call

This is a discussion on Question regarding day trade call within the General Trading Chat forums, part of the Reception category; Hi, I'd like to learn more about day trade call. I have day traded a number of times (buy and ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Oct 14, 2017, 7:06am   #1
 
2 Posts
Joined Oct 2017
Question regarding day trade call

Hi,

I'd like to learn more about day trade call. I have day traded a number of times (buy and then one sell once in a day), but I believe by doing that only once per day, I have not exploit its full potential.

If I have $5000 day buying power, which ones of the examples below will trigger a day trade call and which ones will not? These are the scenarios I am not sure will trigger a call, therefore I ask. Please bear with me, they are a bit cumbersome. Assume at the start of the day I have no stocks. Each example describes the trading activities in exact sequence within a day. For the ones that trigger a day trade call, please provide some explanation if you could. The account has balance over $25000.


(I) If only one stock is involved:

(1)
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A

(2)
Buy $5000 of A
Sell $5000 of A
Buy $5000 of A
Sell $5000 of A

(3)
Buy $5000 of A
Buy $2500 of A
Sell $5000 of A
Buy $2500 of A
Sell $2500 of A

(4)
Buy $5000 of A
Sell $2500 of A
Buy $2500 of A
Sell $2500 of A

(5)
Buy $5000 of A
Sell $2500 of A
Buy $2500 of A
Sell $5000 of A

(6)
Buy $5000 of A
Sell $2500 of A
Buy $5000 of A
Sell $2500 of A

(7)
Buy $5000 of A
Sell $2500 of A
Buy $5000 of A
Sell $2500 of A
Sell $2500 of A

(8) Is there such things as keeping the 1st buy for overnight, the rest as day trades?
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A
Buy $5000 of A
Sell $5000 of A


(II) If 2 stocks are involved:

(21)
Buy $5000 of A
Buy $5000 of B
Sell $5000 of A

(22)
Buy $5000 of A
Buy $5000 of B
Sell $5000 of B

(23)
Buy $5000 of A
Buy $5000 of B
Sell $2500 of A
Sell $2500 of B

(24)
Buy $5000 of A
Sell $5000 of A
Buy $5000 of B
Sell $5000 of B

(25)
Buy $5000 of A
Buy $2500 of B
Sell $5000 of A
Sell $2500 of B

(26)
Buy $5000 of A
Buy $2500 of B
Sell $2500 of B
Sell $5000 of A


Bottom line, what is the formulae for deciding how much day buying power I have left after each trade?

Thanks a million!!

sleepwell!

Last edited by sleepwell!; Oct 14, 2017 at 6:33pm.
sleepwell! is offline   Reply With Quote
Old Oct 14, 2017, 4:35pm   #2
 
Quantt's Avatar
Joined Jul 2017
Quote:
Originally Posted by sleepwell! View Post
Hi,

....

Bottom line, what is the formulae for deciding how much day trading power I have left after each trade?

Thanks a million!!

sleepwell!
Hello, I am bit confused, is this a question about using leverage day trading? If so, I cannot help you - I never use leverage and I don't trade leveraged products...
__________________
"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

My number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
Quantt is offline   Reply With Quote
Old Oct 14, 2017, 6:19pm   #3
 
2 Posts
Joined Oct 2017
sleepwell! started this thread No, it is not about leveraged trading.

Allow me to elaborate a little. Since I only have $5k trading power, if I only do this in a day I will be fine:

Buy $5000 of A
Sell $5000 of A

However, take the first example:
(1)
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A

Just before I try to execute the second "Buy $5000 of A", I usually get a warning message like below:

"This order exceeds the current day trading buying power.
If the resulting position is closed today, a day trade call will be issued.
Day trading with insufficient day trade buying power may lead to a trading restriction on this account."

So the questions is: after I buy the second $5000 of A, can I still go ahead and sell $5000 of A later in the day, without upsetting the system?


In the past, in a situation like this, fearing that my account will be limited, I usually just let both $5000 buys sit overnight, and deal with them the next day. This sometimes leads to gains and losses, because a lot can still happen after the second $5000 buy.

What if I insist on selling $5000 after the second buy. Am I still within the trading limit by doing this?
sleepwell! is offline   Reply With Quote
Old Oct 14, 2017, 10:55pm   #4
 
Quantt's Avatar
Joined Jul 2017
Quote:
Originally Posted by sleepwell! View Post
No, it is not about leveraged trading.

Allow me to elaborate a little. Since I only have $5k trading power, if I only do this in a day I will be fine:

Buy $5000 of A
Sell $5000 of A

However, take the first example:
(1)
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A

Just before I try to execute the second "Buy $5000 of A", I usually get a warning message like below:

"This order exceeds the current day trading buying power.
If the resulting position is closed today, a day trade call will be issued.
Day trading with insufficient day trade buying power may lead to a trading restriction on this account."

So the questions is: after I buy the second $5000 of A, can I still go ahead and sell $5000 of A later in the day, without upsetting the system?


In the past, in a situation like this, fearing that my account will be limited, I usually just let both $5000 buys sit overnight, and deal with them the next day. This sometimes leads to gains and losses, because a lot can still happen after the second $5000 buy.

What if I insist on selling $5000 after the second buy. Am I still within the trading limit by doing this?
I think this is about the US "Pattern day trader" rule, please check this article:

https://en.wikipedia.org/wiki/Pattern_day_trader
__________________
"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

My number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
Quantt is offline   Reply With Quote
Old Oct 27, 2017, 4:05am   #5
Joined Apr 2016
Quote:
Originally Posted by sleepwell! View Post
Hi,

I'd like to learn more about day trade call. I have day traded a number of times (buy and then one sell once in a day), but I believe by doing that only once per day, I have not exploit its full potential.

If I have $5000 day buying power, which ones of the examples below will trigger a day trade call and which ones will not? These are the scenarios I am not sure will trigger a call, therefore I ask. Please bear with me, they are a bit cumbersome. Assume at the start of the day I have no stocks. Each example describes the trading activities in exact sequence within a day. For the ones that trigger a day trade call, please provide some explanation if you could. The account has balance over $25000.


(I) If only one stock is involved:

(1)
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A

(2)
Buy $5000 of A
Sell $5000 of A
Buy $5000 of A
Sell $5000 of A

(3)
Buy $5000 of A
Buy $2500 of A
Sell $5000 of A
Buy $2500 of A
Sell $2500 of A

(4)
Buy $5000 of A
Sell $2500 of A
Buy $2500 of A
Sell $2500 of A

(5)
Buy $5000 of A
Sell $2500 of A
Buy $2500 of A
Sell $5000 of A

(6)
Buy $5000 of A
Sell $2500 of A
Buy $5000 of A
Sell $2500 of A

(7)
Buy $5000 of A
Sell $2500 of A
Buy $5000 of A
Sell $2500 of A
Sell $2500 of A

(8) Is there such things as keeping the 1st buy for overnight, the rest as day trades?
Buy $5000 of A
Buy $5000 of A
Sell $5000 of A
Buy $5000 of A
Sell $5000 of A


(II) If 2 stocks are involved:

(21)
Buy $5000 of A
Buy $5000 of B
Sell $5000 of A

(22)
Buy $5000 of A
Buy $5000 of B
Sell $5000 of B

(23)
Buy $5000 of A
Buy $5000 of B
Sell $2500 of A
Sell $2500 of B

(24)
Buy $5000 of A
Sell $5000 of A
Buy $5000 of B
Sell $5000 of B

(25)
Buy $5000 of A
Buy $2500 of B
Sell $5000 of A
Sell $2500 of B

(26)
Buy $5000 of A
Buy $2500 of B
Sell $2500 of B
Sell $5000 of A


Bottom line, what is the formulae for deciding how much day buying power I have left after each trade?

Thanks a million!!

sleepwell!
That was really the diffficult question to answer....
june_girl7 is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Day Trading Call Question MHTrading First Steps 0 Dec 3, 2014 11:17am
Long Call Options Question kenw232 Futures & Options 5 May 21, 2013 7:18pm
Covered Call Question adamrick Futures & Options 12 Jul 13, 2012 10:05am
Day Trade Margin Call themilton First Steps 13 May 14, 2012 8:15pm
Noob question about Margin Call StockyGuy First Steps 8 Jan 5, 2012 11:05pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)