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Andy Swan Comment On Regulatory Notice 24-13

Andy Swan
Licensed Rep, Charles Schwab

From a trader's perspective, I understand that the intention is to reduce the risk and losses incurred, however, I believe how the system is currently setup, it's created unintended consequences that actually expose trader's to more risk. This system, in terms of only allowing up to three round trips in a rolling five business days, has caused me and other traders to lose money due to the inability to get out of trades because we're trying not to get flagged. Too many times I've had to simply watch a losing trade get worse because closing out would get me flagged. I'm also hesitant to put stop losses on too quickly because each round trip is so important. Furthermore, when I do have profits at the end of the day, I'm hesitant to take them because I want to preserve my round trips so sometimes I risk the overnight exposure which has led to large losses. I'm not a scalper. I only try to trade once sometimes twice a day. I prefer to be closer to a swing trader if possible, but this market has gotten so choppy intraday that it's harder to hold swing option trades anymore.


I believe a minimum adjustment to the rules should be an increase in the number of day trades required to get a trader flagged. I think eight or more round trips to get flagged is a reasonable amount. It allows for one a day plus a little buffer. This way, responsible traders can feel more comfortable putting in stop loss orders or can get out of a losing trade without being punished for it.