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As Tevya said in 'Fiddler on the Roof", the're both right!
You have the right to lose your money starting any new business, and
daytrading
is just another new business.
OTOH, the availability of credit through margin is much easier than
through a
bank or other private sources of funds. Margin is the key to controlling
daytrading without killing it. I am in favor of the practice of some
firms to
reduce the collateral value on fast trading stocks, even to zero if that
makes
sense. I think the Fed or the exchanges should raise the margin rates on
all
stocks, and should develop some volatility-based margining rules.
Also, perhaps we need a few bankrupt day traders (without access to
guns...) to
make the firms who provide the 20x liquidity lose some money and go
bankrupt
themselves.
Regards
DanG
Howard Hopkins wrote:
> The so-called abuses you speak of won't be "solved or prevented" by future
> government intrusion into peoples choice of how they handle their own greed.
> A fool and his money will soon part. Greed will be expressed in one form
> or another. More Big Brother regulation will only establish more "rules" to
> be in violation of.
>
> There was a successful stock daytrader featured on CNBC on Monday said that
> he said people ought to be tested and licensed before being allowed to
> daytrade. Do you think he learned how to trade by reading gov regulations
> and rules? Absurd!
>
> I learned how to trade by losing. You pay your dues through self evaluation
> after losses and wins. Not because you can check the correct box on a test.
>
> Good trading,
> Howard
>
> >From: "comdytrd" <comdytrd@xxxxxxxxxxxxx>
> >To: <realtraders@xxxxxxxxxxxx>
> >Subject: Re: FUT: Demise of Soes Trading Bucket Shops
> >Date: Wed, 11 Aug 1999 16:47:24 -0400
> >
> >SLK for one just pulled the plug on the practice of daytrading firms
> >loaning margin call money to traders (they did so by introducing and
> >setting
> >up loan arrangements with investors...know as "guidos" ).
> >
> >The end of the this arrangement (apparently illegal all along but never
> >enforced until the recent publicity) will stop these bucket shops from
> >extracting the net worths of undercapitalized "newbies".... Unfortunately
> >I've seen dozens of examples. One friend with a net worth of $5000 was
> >allowed to trade $500,000 worth of stock, generating massive commissions.
> >He is now debit and facing bankruptcy.
> >
> >Many of you seem to abhor government regulation, but the lack of
> >enforcement
> >of restrictions already on the books led in large part to the abuses we
> >have
> >witness in the SOES/daytrading "industry" in my opinion.
> >
> >Best,
> >
> >Michael
> >
>
> _______________________________________________________________
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