efflandt asked in Business & FinanceInvesting · 4 years ago

Day trading question if already owned some, buy/sell some (not all)?

If you own 200 shares of stock, it takes a dip, you buy 100 more in the dip and sell 100 same day when it goes up some, is that considered a day trade since FIFO would consider you selling shares you already owned from an earlier date?


That is what I meant, whether it counted as "pattern" day trading. It is an IRA, so tax implications like wash sale rules do not matter. It is sort of considered a margin account, but "cash margin", not borrowed money. So I can do anything with defined risk except selling naked calls or shorting stock.

Since the account has over $500k in assets, I wonder it it would qualify for pattern day trading, as long as it has settled cash to cover the trades and does not hit the free ride rule?

Update 2:

I confirmed with my broker that since my IRA is considered a margin account (even though "cash margin") and has enough assets, even if I would get tagged as "pattern day trader" it would not be a problem.

2 Answers

  • 4 years ago
    Favorite Answer

    If you buy and sell the same day, that is a day trade. You've increased a position and reduced the position on the same day in the same stock, this is considered day trading regardless of when you bought the stock you've sold. But this is not pattern trading.

    There is nothing wrong with day trading nor are there any major restriction on such except, all purchases must be paid in full or proper margin on deposit. Because people do not understand "pattern trading" they believe that the rules a pattern trading applies to all day trading - they do not.

    To answer your inquiry directly - a day trade is increasing a given position day and reducing that positon in the same stock in the same day. FIFO/LIFO is an accounting and tax issue, not a trading issue.

    Source(s): from The Street
  • Anonymous
    4 years ago

    A Nobody is correct. But I hate the pattern day trading rule so I propose you investigate: http://www.cygrouponline.com/ or http://suretrader.com/ or http://www.tradingschools.org/reviews/trade-zero/ other alternatives: hold overnight, trade futures, use a cash account.....avoid day trading?

    Source(s): Check out stock symbol optt over last 3 days=why i day trade
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