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zecco - accidental day trading.. now account locked

post #1 of 22
Thread Starter 
I use zecco for trading and im shy of 25k by a few grand and i accidentally pattern day traded.. Now my account is locked, i cannot buy anything only sell.. I was reading their website and they say first time offense is just a warning, but i want to ask anyone here..
Has anyone else had this problem with Zecco? or other broker?
Will there be a delay to get my account unlocked?
What happens if i pattern day trade again?

btw why the fu.ck did the SEC make this rule?
post #2 of 22
Call them and it should get settled right away, at worst the next day. If you PDT again, most likely you will be restricted from buying anything for 90 days.
post #3 of 22
Thread Starter 
Yea i plan to call early monday morning, i just want to make sure my account will get unlocked quickly so i can do some trading monday... because if not i was going to transfer some money to my scottrade account
post #4 of 22
Quote:
Originally Posted by jumpman6235 View Post
Yea i plan to call early monday morning, i just want to make sure my account will get unlocked quickly so i can do some trading monday... because if not i was going to transfer some money to my scottrade account
You may have to wait until Tues, I have no idea but that's a guess. I don't think your transfer would clear any quicker though.
post #5 of 22
Thread Starter 
yea i was wondering about that too but on their site...
Quote:
Easily, quickly and securely transfer funds online into your Scottrade account(s). Money DirectTM (ACH) facilitates same-day online fund transfers from your bank into any of your individual, joint, IRA, ESA or SEP accounts.

If your bank participates in an ACH network or if you're a first time Money Direct user whose account is verified by instant account verification, you can use Money Direct and transact the same day. If you use the challenge deposit method, you may have to wait up to three business days. New and existing clients will be given credit for the transfer the day it is requested, as long as the request is made prior to 8:45 p.m. (ET) Monday through Friday. Transfer instructions received on a non-business day or after the specified cutoff time will be processed the next business day around 6:00 a.m. (ET).
So i might just start a transfer right now, just in case zecco takes some time
post #6 of 22
They emailed me about it and I emailed them back saying "sorry". They unlocked it the next day.
post #7 of 22
Thread Starter 
Quote:
Originally Posted by fastang View Post
They emailed me about it and I emailed them back saying "sorry". They unlocked it the next day.
Cool, thanks.. i guess ill just wait it out then.. but i didnt get an email from them yet (prolly cuz i PDTed on friday)


Im reading why the SEC implemented this rule... am i crazy or is this total bullshit?

How is holding a stock for two days less risky than holding for one day?
post #8 of 22
.
post #9 of 22
Thread Starter 
Quote:
Originally Posted by Zixi View Post
this seems to be one of the biggest things new traders don't understand

nobody cares if you buy and sell the same stock 100 times an hour....but they want you to use YOUR MONEY!

it takes time for money to settle.... it doesn't instantly appear in your account when you sell a stock...

so thats why the rules exist...

if you have less than 25k and want to short term trade then use a CASH ACCOUNT.....not a margin account....then the only rule is you have the money to trade with... if you have the cash you can buy and sell the same stock as many times as you want...

the rules for a cash account and a margin account are totally different

i would have both..if I had 10k i would have 5k in a margin account and 5k in a cash account..then depending on what you want to do you would use the right account....

for example, if i wanted to day trade some stock buying and selling it i would use the cash account... if i wanted to sell a stock short i would use the margin account etc...

you can get really creative trade wise with two accounts
Isnt the whole purpose of a margin account is to use THEIR money so you dont need to wait for the funds to settle?
when i buy X, Y, Z then in the same day sell A, B, C then again in the same day buy E, F, G ... am i not using their money? how is this different then buying and selling the same stock?
Why 25k? .. why not 5,10,50,100?
post #10 of 22
Quote:
Originally Posted by jumpman6235 View Post
Isnt the whole purpose of a margin account is to use THEIR money so you dont need to wait for the funds to settle?
when i buy X, Y, Z then in the same day sell A, B, C then again in the same day buy E, F, G ... am i not using their money? how is this different then buying and selling the same stock?
Why 25k? .. why not 5,10,50,100?
Okay...you sort of answered your own question.

Let me ask you this, would you allow just anyone to borrow money from you and give them an unlimited ability to trade as they wish, with YOUR money? They gotta protect their own interest. Using their money is a privilege, not a right. It's their money and they get to make the rules. If you do not like the rules, USE YOUR OWN MONEY!

The reason you have to wait three days to settle after you've bought and sold a stock is that the trade has to be verified and that it not be disputed in some manner. There are such a thing as "fail to deliver", meaning that the trade was executed, but there were not really shares to be had to buy and sell. These are just safeguards for both the trader and the broker.

And as for the $25k, there has to be a line drawn. It might be an arbitrary number, but lots of things are that way. They set it up and I think you'll be hard pressed to try to have it changed. $25k may represent the threshold of capital that institutions consider to be a stable amount. Like, hey, if you've got $25k you're more apt to protect that amount than if we were to allow say only $10k, which in the scheme of things people are more able to recover from a total loss than $25k.

Anyways, rather than complain about it, which will get you nowhere, how about just following the rules?
post #11 of 22
Thread Starter 
Quote:
Originally Posted by mmm...Jaz View Post
Okay...you sort of answered your own question.

Let me ask you this, would you allow just anyone to borrow money from you and give them an unlimited ability to trade as they wish, with YOUR money? They gotta protect their own interest. Using their money is a privilege, not a right. It's their money and they get to make the rules. If you do not like the rules, USE YOUR OWN MONEY!

The reason you have to wait three days to settle after you've bought and sold a stock is that the trade has to be verified and that it not be disputed in some manner. There are such a thing as "fail to deliver", meaning that the trade was executed, but there were not really shares to be had to buy and sell. These are just safeguards for both the trader and the broker.

And as for the $25k, there has to be a line drawn. It might be an arbitrary number, but lots of things are that way. They set it up and I think you'll be hard pressed to try to have it changed. $25k may represent the threshold of capital that institutions consider to be a stable amount. Like, hey, if you've got $25k you're more apt to protect that amount than if we were to allow say only $10k, which in the scheme of things people are more able to recover from a total loss than $25k.

Anyways, rather than complain about it, which will get you nowhere, how about just following the rules?
isnt this rule made by the SEC?... so its not the broker that is making this rule.. the broker does not have the option of letting people with less than 25k PDT...

I think you missed my point.. im saying im going to be borrowing money regardless if its by PDTing or buying & selling different stocks .. so i cant see how the argument that the broker is protecting their lending habits is the reason, because the lending is going on no matter what

Im brand new to trading and im just trying to figure out why this rule was implemented... i guess you see it as complaining. Yes, I know i have to play by the rules and theres nothing i can do about it...
post #12 of 22
No. You're right, I did kind of come off as an ass and I didn't mean to do that. My bad. I personally hate the PDT rule myself and I wish there were a way a large group of us day/swing traders could petition for that rule to be lifted. It isn't even really that old of a regulation. And many traders don't think it even helps protect them, and in many cases, because if you've maxed your limit already and go into a trade that you have to hold overnight, even perhaps a day or so, could lead you to losses you could have avoided had you been able to sell the same day you bought it. I feel you man.
post #13 of 22
Thread Starter 
LoL ... Your last two posts are day N night.. i was wondering what you had against me lol .. you musta made some good $$$ today hehe
post #14 of 22
I have nothing against anyone. I have my convictions and I try to be concise and deliberate, in addition to my cuddly smart-assy self, and attempt to provide the facts as they are, but I am not above admitting if I'm wrong, if not about the context of my post, then how I came across in it.
post #15 of 22
oooh this clears alot up because i thought in order to day trade PERIOD you needed to have a margin account. didnt make a whole lot of sense to me but now it does.

so now that I know I can day trade with my own cash...im gonna go lose it all baby!
post #16 of 22
buy etfc and you won't lose right now
post #17 of 22
Thread Starter 
UPDATE:
---
So back on 6/6/09 i actually submitted a question to the SEC:
How is holding a stock for two days less risky than holding it for one day?
---
I just received a response:
Thank you for contacting the SEC.

The answer to your question has to do with the fact that before the day trading rules were in place, intra-day risk was being created without any offsetting buffer against that risk through the existing margin requirements.

It may be helpful if we could discuss your question or concern by phone. Please feel free to call me toll free at (800) SEC-0330 or at my direct line (202) 551-6349. Please refer to the above file number when you call.

I hope this information is helpful.

Sincerely,


Steven G. Johnston
Special Counsel
U.S. Securities and Exchange Commission
---
post #18 of 22
wow you asked the SEC a trading question, nice.
post #19 of 22
Too bad its a load of b.s. I've heard they made it a rule because institutions hated that any joe schmo could day trade as much as he wanted, and that caused the stocks to be more volatile because he could jump in and out with small lots sizes no problem, and they can't.
post #20 of 22
I was able to get my account unlocked after talking to them.
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