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Instead of looking towards the negatives which may/may not be associated with
a regulatory change, look towards ways in which other areas may benefit
(remember creative destruction?). Why settle for 2-1 when you can do some
serious damage with 10+ to 1 at some shady non-SIPC protected LLC? Why wait
for an uptick/upbid and have to actually locate stock every time you enter a
short sale when you can trade offshore or open a Canadian brokerage account
where these rules don't apply? Look at the commodity markets; charts are
charts and if you can trade equities successfully there may be a good
probability that you can trade commodities (with their minimal margin) just
as well.
Also, remember that the debit balance was loaned to you by your
broker/dealer. Granted that any firm which would allow frequent daytrading
on $2K in equity has a worthless compliance/risk management program, it is
still their money. What if the firm decides to develop an in-house rule to
not allow certain stocks to be marginable (as many clearing firms
have)...will you go crying to the Federal Reserve Board to have them tell the
clearing firm to margin your stock? What if Mr. Greenspan decides to raise
margin to 75% from 50% initially? Boo hoo hoo...woe is you. I despise
government regulation as much as the next conservative but look to the
alternatives and some of the deeper reasonings before coming to a quick
judgement.
Comments welcome,
Chris
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