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daytrading buying power in a non day trading account

post #1 of 4
4/27/12 at 11:54am
Thread Starter 

I recently withdrew some money from one of my brokerage accounts which caused it to fall below the 25k minimum for classification as day trading account.

I know that in a NPDT account, I can only conduct 3 day trades in a rolling 5 day period.

However i noticed that after reclassification my buying power remained the same,i.e. 4X buying power, not 2x.

I subsequently used this 4X BP unknowingly to conduct a day trade yesterday.

I am somewhat confused about the rules. Am I prohibited from doing this, will i suffer some kind of margin call?

Can anyone clarify?

Thanks.

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post #2 of 4
4/28/12 at 2:42pm

Your buying power could be just a result of the account being a Margin account still. Depends on the broker and your margin capabilities but that is my guess.

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post #3 of 4
4/28/12 at 3:33pm

It takes 1 or 2 business days for them to update that stuff.


I remember once when I had a 25k account, I withdrew 20k and made 5 daytrades afterwards (10 total trades) even though my account only had 5k in it. The next day I received a message saying that I had made 3 day trades in the past 5 days even though I know I had made 5. 

 

Rules are firm, but it just takes them a day or two to update your account. 

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post #4 of 4
4/29/12 at 2:41am

the only thing you cannot do, is use intraday profits to day trade with. Otherwise you will suffer a margin call. those need to settle that night.

 

If you do 10 DT in  5 day peroid, and then remove some of your assets falling below the 25K .. then you will get a EM call perhaps, depends on your broker.. Its kinda best to wait for that association to roll over and then remove.

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