Is it bad to be considered a pattern day trader?

[her209]

Pattern day trader

What's up with all the restrictions?

 

[kranky]

Probably because if they let anyone do it, when the inevitable losses came, they would sue their broker for letting them day-trade the market when the broker "should have known" they weren't sophisticated enough to handle it.

 

[BrownTown]

Its is because they think a bunch of idiots will invest their money in day trading and lose it all. Thats not even the real problem, the problem is that when your trading on margin you don't just lose your money you lose the banks too, and then you don't have any money to pay it back and you default on your loan.

 

[her209]

Originally posted by: kranky
Probably because if they let anyone do it, when the inevitable losses came, they would sue their broker for letting them day-trade the market when the broker "should have known" they weren't sophisticated enough to handle it.

Originally posted by: BrownTown
Its is because they think a bunch of idiots will invest their money in day trading and lose it all. Thats not even the real problem, the problem is that when your trading on margin you don't just lose your money you lose the banks too, and then you don't have any money to pay it back and you default on your loan.

You could lose big on just one bad investment. It seems silly that the SEC would allow day trading at all albeit requiring the trader have at least $25,000, i.e. more money to "lose".