After a lot of retail day traders lost their shirts in the dot-com crash, FINRA made a rule restricting pattern day trading to those with over 25K in their accounts.
I wouldn't be surprised to see a similar rule for options trading come out of this.
I wouldn't be surprised to see a similar rule for options trading come out of this.
If you’re talking about “Most of the time”, most of the time you will lose the lottery, but make money on buying a stock, on average at the overall rate of return of the market as a whole.
Retail investors (aka people buying stocks as investment) are unaffected by that limit.
This isn't true in the slightest. Market makes might favor liquidity providing strategies but the vast majority of day traders do not. Retail day traders are trading lower volumes and do not move markets. They are much more advantaged in this respect (although they typically lack the informational edge of pros).
> It's easy for commercial investors to push out retail traders because they can provide more liquidity.
This just also isn't true at all. Everything has a price, including liquidity and as a perfectly fungible good, it doesn't matter who the seller is. Exchanges operate on price-time priority so if you provide liquidity at a better price, or before someone else, then it doesn't matter how big you are or how much you provide (within the context of vanilla ETPs relevant to day trading).
You do realize that lotteries have negative expected value right? That means that the net losses of losers exceed the net gains of winners...it's the epitome of unfair.
> With trading, most of the time, they will lose and someone with millions in the bank will win.
This just sounds like someone with an anti Wall Street chip on their shoulder. In most industries, the "winners" have millions in the bank...that's how they got the millions.
[0] https://fivethirtyeight.com/features/what-percentage-of-stat...
Another way to look at laws is that they protect the public from the predatory forces that we can't seem to just outlaw outright. Because PACs get in the way of legislation for the public good.
I'm sure there's some other way to look at it but I've already found at least one I agree with.
But regulating something where the sole requirement to access it is to just have more money, is ridiculous. If trading options is so dangerous, requiring a license might make sense. Requiring that you just be rich to do it makes no sense.
There is no restriction on being able to trade options with less than 25k in an account.
I'd indeed meant that the pattern day trade restrictions of USD 25k also applies to Options Traders who seek to day-trade Options in the U.S.
This was just my observation/information-sharing, and not a disagreement with anyone.