I locked up four thousand dollars to make a 10 percent profit for how long?
I bought 200 shares at $20 a share. Consensus reads neutral and Reuters shows hold.
3 weeks later Consensus reads negative and Reuters shows sell. You're at 20 cents a
share in the negative.
Day traders generally use margin leverage; in the United States, Regulation T permits
an initial maximum leverage of 2:1, but many brokers will permit 4:1 leverage as long
as the leverage is reduced to 2:1 or less by the end of the trading day. In the United States,
people who make more than 3 day trades per week are termed pattern day traders and are
required to maintain $25,000 in equity in their accounts. Since margin interest is typically
only charged on overnight balances, the trader may pay no interest fees for the margin benefit,
though still running the risk of a margin call. Margin interest rates are usually based on the broker's call.
In the United States, a pattern day trader is a Financial Industry Regulatory Authority (FINRA)
designation for a stock trader who executes four or more day trades in five business days in a
margin account, provided the number of day trades are more than six percent of the customer's
total trading activity for that same five-day period