day tradingsoftwareday traderstock day trading
I recently started trading stocks. I started buying and selling stocks using stocktrade almost every other day. Is there anything I need to know regarding taxes (Is there a limit on how long should i keep the shares etc). I am new to all this.
Day trading


Without knowing what you already know, it's hard to know what to tell you. What I will do is give you a link to great site for explaining the tax implications of trading stocks.

http://www.fairmark.com/capgain/

You can choose how much of the material you want to read, but I suggest you be sure to read the section on "wash sale" rules given the way you described your trading.

If i were to invest 140,000 dollars in 1 brk.a stock, and i buy in the morning and sell in the afternoon making a profit of say 2,000 dollars would I be able to use that fund to buy another share of brk.a the next day?
Day trading


Yes if you do this 4 or more times in a week, however, you will be tagged by the SEC as a pattern day trader. This just imposes special trading rules on your account. Mainly, you must maintain a balance of $25,000 or more at all times. Since you are talking about investing $140,000 then this wont be an issue. Other regulations pertain to margin accounts and non-withdrawl requirements. Also remember that profits made by day trading are subject to normal income tax, they don't receive the special tax treatment of long-term capital gains. But the short answer to your question is yes, you can do this.
During "Day" or "at market close?" I am completely new to trading. I want to do short term trading. Just give me an overview of trading for dummies.
Day trading


People spend years learning how to trade & you want a short quick answer……… sorry…. there is no such thing.

If there was a "best time" to trade… wouldn't all the professionals be doing it. I do have some rules for myself;
I never buy/sell before 10:00PM EDT
If a stock reaches its high 5 minutes before 4:00PM, I'll buy.
I never trade during the hours of 11:30AM-1:30PM (lunch)

BUT…. these rules mean nothing without a ton of information I or anyone here can give you.

Here's some places to start;
http://www.alphatrends.net/ (best "sum up" of daily activity on the web).
http://www.tradingwithtk.com/ (good teacher, dangerous stocks).
http://streamer.thinkorswim.com:8000/shadowtrader.m3u
(great market comentary during the day, 9:15AM - 4:00PM EDT).

ya@eriestocktrader.com

Inexperienced trader seeking for experienced traders' input: (Thanks in advance for your time)

It was 10/18 - before 1:00am - when I placed an online order to buy ONT with limit $1.20 each. I got it for $1.16 - the highest ONT trading rate for the day - even at 10:30 am east - when I called my broker to ask why I got the shares at the highest rate:

1) Broker said AMEX trading hours for ONT have not really started at 9:30am.
2) The charts on broker site show the AMEX opening hours: 9:30 am/ Opening price for about 4 minutes: $1.07/share and it did not jump right away to $1.16.
3) I did not order to buy the shares before the AMEX opening hours. But my broker said it is how AMEX deals with the orders.
4) Broker also said that if I had placed an order to sell, it would
get processed immediately. Since I placed the order to buy, it didn't get thru so fast.

Is here any trading sense from his say or he forgot to add key words?

Day trading


First, if you are a long term investor, you were willing to pay 1.20 according to your limit and you got filled at 1.16 so it's a good fill according to your instructions. Long term, 4 cents isn't going to make much difference.

Second, if you consider yourself a "trader" a lot of weird things happen in the pushing and shoving of the open. The specialists on the floor make a huge amount of money at this time. In this case, it wouldn't surprise me if the specialist/market maker first did a bunch of buying of opening orders (ONT opened at 1.07) and then sold to the opening buy orders at 1.16 (ONT jumped to 1.16 right after the opening) thus making 0.09 per share just for being the specialist/market maker. He has no obligation to match the orders of public buyers with public sellers. It's good to be the market maker. Traders like me always wait to see how the stock opens to get confirmation before placing an order. A lot of things can happen in the news between 1AM and the market open. Traders never put in orders and let them sit that long.

Does selling a stock that you've owned for awhile (weeks or months or whatever) then buying it back that day at a lower price, count aginst your 3 'day trades' in a 5 day period? If so…well…then that blows….
Day trading


The situation you describe is not "day trading."

According to the NYSE definition of "day trading" the sale of an existing position from the previous day is a liquidation. The repurchase of that position is the establishment of a new position. It is not subject to day trading margin requirements.

If you are using a cash account, settlement rules would still apply.

From the prospective small investors point of view, which market is the better one to do day trading/ penny stocks .. and why.
Day trading


Here's something many traders don't know:
To "day trade" or "scalp": A trader MUST have - AT ALL TIMES - AT LEAST $25,000 U.S. CASH in his/her/their trading account.

This does not include any stocks or trades the trad err might be in. This is cold, hard U.S. CASH.

As soon as the account goes one cent below $25K, a whole different set of rules comes into play.

Check with your broker or any broker to confirm what I write. There MAY BE exceptions.

As far as penny shares:
They are far, far, far too risky and volatile.

Thanks for asking your Q! I enjoyed doing my best to answer it.

VTY,
Ron Berue
Yes, that is my real last name!

I read that you have to have a margin account with $25,000 in order to buy and sell multiple times per day (more than 4 buy/sells per 5 day period). Does a margin account mean you have to have a loan from a bank, and do you have to have good credit? Or can you do it all with your own cash?

What other restrictions are there for trading an average of more than once per day?
I know there are lots of rules and regs. Just a short concise list of the basic reqs is all I'm looking for.

Day trading


There is no outright requirement to be a day trader.

Generally, you need to trade on margin. it is not really the same as margin generally.

Margin is taking a loan from a stock broker to buy more securities.

With day trading, you are borrowing money from your broker because the cash you receive from a trade takes a few days to clear.

The current market exists on a T+3 system it can take up to 3 days fro money and shares to actually change hands.

So to continue to trade on money you do not yet have, youborrow it. Unlike regular margin, there is not the same degree of risk invivled with normal margin purchases.

Some brokers let you do this without a margin accont because their getting the money is a sure thing and they still profit off of you from the commissions.

I want to invest in some stocks, I am a first timer. I recently was looking through the paper and saw there were a couple of stocks around just a penny, so why not take a chance a get acouple thousand shares at that price, but I don't know how to go about purchasing those stocks, and the fees involved I am not reall worried about that risk, due to the fact I am only going to invest abut $100 can some one please stear me in the right direction.
Day trading


Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions will usually (not necessarily always) be closed before the market close of the trading day. Traders that participate in day trading are called day traders.

Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.

Day trading used to be the preserve of financial firms and professional investors and speculators. Many day traders are bank or investment firms employees working as specialists in equity investment and fund management. However, day trading has become increasingly popular among casual traders due to advances in technology, changes in legislation, and the popularity of the Internet.

Trade Frequency

Although collectively called day trading, there are many sub-trading styles within day trading. A day trader is not necessarily very active. Depending on one's trading strategy, the number of trades made in a day may vary from a few to hundreds.

Some day traders focus on very short or short-term trading, in which a trade may last seconds to a few minutes. They buy and sell many times in a day, trading very high volumes daily and therefore receiving big discounts from the brokerage.

Some day traders focus only on momentum or trends. They are more patient and wait for a ride on the strong move which may occur on that day. They make far fewer trades than the aforementioned traders.

Overnight Position

Traditionally it is suggested day traders should always settle their positions before the market close of the trading day to avoid the risk of price gaps (differences between the previous day's close and the next day's open price) at the open. Some day traders consider this to be a golden rule to be obeyed at all times. Some day traders, however, believe they should let the profits run, so it is acceptable to stay with a position after the market closes.

Day traders often borrow money to trade. Since margin interests are typically only charged on overnight balances, the extra costs discourage them from holding positions overnight.

Profit and Risks

Because of the nature of financial leverage and the rapid returns that are possible, day trading can be extremely profitable, and high-risk profile traders can generate huge percentage returns. Some day traders manage to earn millions per year solely by day trading.

Because of the high profits (and losses) that day trading makes possible, these traders are sometimes portrayed as "bandits" or "gamblers" by other investors. Some individuals, however, make a consistent living day trading.

Nevertheless day trading can become very risky, especially if one has poor discipline, risk or money management. The common use of buying on margin (using borrowed funds) amplifies gains and losses, such that substantial losses or gains can occur in a very short period of time. In addition, brokers usually allow bigger margins for daytraders. Where overnight margins required to hold a stock position are normally 50% of the stock's value, many brokers allow pattern day trader accounts to use levels as low as 25% for intraday purchases. This means a day trader with the legal minimum $25,000 in his account can buy $100,000 worth of stock during the day, as long as half of those positions are exited before the market close. Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his original investment, or even larger than his total assets.

Even when a position has made a profit, the trader has to offset the transaction costs and the interest on the margin. It is commonly stated that 80-90% of day traders lose money. An analysis of the Taiwanese stock market suggests that "less than 20% of day traders earn profits net of transaction costs".

Day trading is considered a risky trading style, and regulations require brokerage firms to ask whether the clients understand the risks of day trading and whether they have prior trading experience before entering the market.

Recently I've been watching CNBC and during the last couple days they've been saying that trading curbs have gone in due to the volatility. What does this mean? What are the curbs?
Day trading


The curbs are restrictions on the the computer trading of the exchange this way they can limit the swings of the days. The curbs that have been instated over the past few days have been the NYSE collar. These are stated when the NYSE exchange moves more then 2% in a day. This specific rule only affects the trading of S&P 500 stocks. For a complete list go to http://invest-faq.com/cbc/exch-circuit-brkr.html.
I am ex-employee with vested stock options of company. First, is it right for the company to freeze my option account? And if the company freeze the trading under SEC rule, should I get extension beyond my option expiration date since I won't be able to trade within the 90 day after my termination of employment due to the trade freeze?
Day trading


It is legally possible for the company to freeze your account. "Right or wong" is an ehical/ or moral consideration. I assume the grantor set the terms before you were granted the stock.