re: PDT: that’s the age old debate. Freedom vs regulation. I think that so many retail traders shouldn’t be trading. It’s dangerous and you can lose so much more than just your investment. It’s trivial to add a zero to whatever you are doing and the money is intangible. Lots of scammers out there that pray on unsophisticated people. Reality is that virtually no one makes it in the day trading space and if you are poor (no excess capital) you are almost certainly going to lose everything and then some. I personally know factory workers who in the 1990s quit their jobs to be day traders and came back to my company essentially bankrupt. trading is dangerous. It’s easy to add a zero to whatever you do, brokers are eager to enable you, earning is difficult but it looks like it’s easy. perhaps account size isn’t the best way to protect these people, but I can’t think of a better way especially since the industry is largely self regulated. “it’s so easy a baby can do it”
I never understood the logic of making people gather $25,000(Not $24,999, not $20,000 or $100,000) and giving them 4x intraday buying power. I remember a friend in Etrade’s margin department tell me they were having more wipeouts under the new rules than before. That was probably twenty years ago, maybe things changed?
What was the reason for implementing in the first place? Was it the rampant losses at the end of the NASDAQ boom in 2000-2001? If I remember correctly the retail participation after 2001 collapsed to its early 1990s level. It didn't really come back until like 2016 after Trump won. I guess it's like 1929 when it collapsed until like the early 1980s under Reagan.
Yes, Your points are well written and you have a successful company and you also have solid option trading knowledge that I have learned from, but some Politician might not have allowed you to EVEN start your own company using similar failure stats for company biz startups. The 'Pols' would have "saved" you from your own foolish folly have having the ambition to start your own company (or trade your own account) Every company must start sometime but should they be allowed to do so (using your logic) considering the failure rate stats of biz startup failure at greater than 85%... Link to Failure Rate Stats """ 9 out of 10 startups fail (source: Startup Genome - the 2019 report claims 11 out of 12 fail). """
The government actually subsidizes startups (via small business loans and tax policy) because we as a society want to encourage that behavior because its good for society and its part of the American spirit. Gambling (which day trading is at that level) is and should not be encouraged. it shouldn't be outlawed, but it shouldnt be encouraged. Look at all the people who lost money in Crypto because Leonardo DiCaprio pimped some shitcoin. EDIT : Thank you for the compliment. I want to reiterate that i'm not sure the PDT rule is specifically the best way to regulate this, but there needs to be some kind of regulation. And unlike casino's wall street is self regulated so the government has fewer levers to pull.