How to be a day trader in canada
Your funds will be held by Interactive Brokers Canada in a bank account. Each night, after the close of trading that day, Interactive Brokers Canada will remove funds from this bank account to pay for your trade settlement and margin obligations that arise from that day's transactions, including changes in the market value of positions held in your account.
In turn, your Daily Account Statement will reflect debits made to your account for your settlement and margin obligations. Of course, your Daily Account Statement will also reflect other debit items such as margin interest, commissions, and withdrawals; and, credits to your account, for example, for deposits, proceeds from sale transactions, interest, dividends, etc.
TOP How long will it take for account approval? Commission are quoted in the currency of the exchange on which the trade took place. Exchange rates are subject to fluctuation. Please contact Interactive Brokers Canada by e-mail, or by telephone to the telephone number indicated on the Interactive Brokers Canada website. No, and we do not expect to offer these accounts in the near future. TOP What jurisdiction's tax laws am I subject to?
You must consult with your independent tax advisor regarding the tax implications of your Interactive Brokers Canada account. Neither Interactive Brokers Canada nor its personnel are authorized to provide you with tax, investment or other advice. Can we trade the Canadian stock exchanges? How does the SEC day trading rule affect Canadians? How long will it take for account approval? A customer who only day trades does not have a security position at the end of the day upon which a margin calculation would otherwise result in a margin call.
Nevertheless, the same customer has generated financial risk throughout the day. The day-trading margin rules address this risk by imposing a margin requirement for day trading that is calculated based on a day trader's largest open position in dollars during the day, rather than on his or her open positions at the end of the day.
The SEC received over comment letters in response to the publication of these rule changes. Day trading refers to buying then selling or selling short then buying the same security on the same day. Just purchasing a security, without selling it later that same day, would not be considered a day trade. As with current margin rules, all short sales must be done in a margin account. If you sell short and then buy to cover on the same day, it is considered a day trade.
Your brokerage firm also may designate you as a pattern day trader if it knows or has a reasonable basis to believe that you are a pattern day trader. For example, if the firm provided day-trading training to you before opening your account, it could designate you as a pattern day trader. Would I still be considered a pattern day trader if I engage in four or more day trades in one week, then refrain from day trading the next week? In general, once your account has been coded as a pattern day trader, the firm will continue to regard you as a pattern day trader even if you do not day trade for a five-day period.
This is because the firm will have a "reasonable belief" that you are a pattern day trader based on your prior trading activities. However, we understand that you may change your trading strategy. You should contact your firm if you have decided to reduce or cease your day trading activities to discuss the appropriate coding of your account.
This collateral could be sold out if the securities declined substantially in value and were subject to a margin call. The typical day trader, however, is flat at the end of the day i. Therefore, there is no collateral for the brokerage firm to sell out to meet margin requirements and collateral must be obtained by other means.
Accordingly, the higher minimum equity requirement for day trading provides the brokerage firm a cushion to meet any deficiencies in the account resulting from day trading. The credit arrangements for day-trading margin accounts involve two parties -- the brokerage firm processing the trades and the customer. The brokerage firm is the lender and the customer is the borrower.
No, you can't use a cross-guarantee to meet any of the day-trading margin requirements. Each day-trading account is required to meet the minimum equity requirement independently, using only the financial resources available in the account.
What happens if the equity in my account falls below the minimum equity requirement? I'm always flat at the end of the day. Why do I have to fund my account at all? Why can't I just trade stocks, have the brokerage firm mail me a check for my profits or, if I lose money, I'll mail the firm a check for my losses?
It is saying you should be able to trade solely on the firm's money without putting up any of your own funds. This type of activity is prohibited, as it would put your firm and indeed the U. The money must be in the brokerage account because that is where the trading and risk is occurring. These funds are required to support the risks associated with day-trading activities.
You can trade up to four times your maintenance margin excess as of the close of business of the previous day. You should contact your brokerage firm to obtain more information on whether it imposes more stringent margin requirements.
If you exceed your day-trading buying power limitations, your brokerage firm will issue a day-trading margin call to you.
Until the margin call is met, your day-trading account will be restricted to day-trading buying power of only two times maintenance margin excess based on your daily total trading commitment.