The rules of Finra need to be changed. They may have been created to help reduce the predatory practices of unscrupulous brokers and protect individuals from such practices, and there may be a need to protect individuals from themselves, but we each bear the responsibility of knowing what we are doing at any given time. I have traded stocks, options, futures and forex. It is a lifelong process, and I currently trade stocks, options, and futures. Since Finra only governs stocks and options I will relate only those concerns.
The "rules" act not only to protect, but to hobble. In trading, flexibility to act as circumstances change is invaluable. Making a "rule" to be punitive diminishes the ability to think flexibly. I made a trade on Thursday December 19, 2024. My assessment was that the market would retrace the flash selloff on Wednesday. I put a fibonacci scale on the chart and saw where the 50% level was of the selloff. I know there is no guarantee, but probability was with me. I bought 1 call QQQ at the money with a strike of $519 and expiration December 24, 4 trading days. Time decay would go fast. The market moved against my position, but I was certain the market would move to the 50% level. The day closed lower and opened lower still. I waited for the market to open on Friday and seeing price had recovered I bought another call same strike same expiration. The market recovered Friday, and I sold both positions, of course being penalized for the Friday day trade.
The rules hobble small traders who may want to close a position that is profitable before the market erases all the gains, or if the trade is a loss and wants to limit the loss, but believes if they do, they will be penalized for a day trade. The necessity to protect one's capital outweighs any arbitrary rule, and that needs to be taken into account when revising the rules.
I have a small account and one larger account. The small account is a margin account as I trade level 2 options, and again I would be penalized if I changed my account to cash. They would limit me to options level 1, which again restricts the flexibility needed to profit consistently.
You drag and drop feature does not work. I created a screenshot of my chat marked up so you could see it but it does not accept it.
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Larry Shephard Comment On Regulatory Notice 24-13
The rules of Finra need to be changed. They may have been created to help reduce the predatory practices of unscrupulous brokers and protect individuals from such practices, and there may be a need to protect individuals from themselves, but we each bear the responsibility of knowing what we are doing at any given time. I have traded stocks, options, futures and forex. It is a lifelong process, and I currently trade stocks, options, and futures. Since Finra only governs stocks and options I will relate only those concerns.
The "rules" act not only to protect, but to hobble. In trading, flexibility to act as circumstances change is invaluable. Making a "rule" to be punitive diminishes the ability to think flexibly. I made a trade on Thursday December 19, 2024. My assessment was that the market would retrace the flash selloff on Wednesday. I put a fibonacci scale on the chart and saw where the 50% level was of the selloff. I know there is no guarantee, but probability was with me. I bought 1 call QQQ at the money with a strike of $519 and expiration December 24, 4 trading days. Time decay would go fast. The market moved against my position, but I was certain the market would move to the 50% level. The day closed lower and opened lower still. I waited for the market to open on Friday and seeing price had recovered I bought another call same strike same expiration. The market recovered Friday, and I sold both positions, of course being penalized for the Friday day trade.
The rules hobble small traders who may want to close a position that is profitable before the market erases all the gains, or if the trade is a loss and wants to limit the loss, but believes if they do, they will be penalized for a day trade. The necessity to protect one's capital outweighs any arbitrary rule, and that needs to be taken into account when revising the rules.
I have a small account and one larger account. The small account is a margin account as I trade level 2 options, and again I would be penalized if I changed my account to cash. They would limit me to options level 1, which again restricts the flexibility needed to profit consistently.
You drag and drop feature does not work. I created a screenshot of my chat marked up so you could see it but it does not accept it.