glider
59 posts
msg #38112
- Ignore glider |
9/20/2005 5:41:47 PM
Does anyone know the answer to the following:
I own 1,000 shares of a particular company. On a given day, I buy 500 additional shares. Later the SAME day, I sell 500 shares. Is this regarded as a day trade considering I already owned 1,000 shares. Could the 500 sold be from this 1,000 lot?
Thanks
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pmperreca
1 posts
msg #38114
- Ignore pmperreca |
9/20/2005 7:32:35 PM
Sure you can designate any lot that you want, in fact for tax purposes it does indeed make a difference, on my etrade account it asks you what lot you want to sell when you go to sell stock if you have more shares then you are selling
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da-net
55 posts
msg #38125
- Ignore da-net |
9/21/2005 4:30:56 PM
It is interesting that you asked this question as my purpose for using SF was so that I might have some fun and trade BB (under $1.00) stocks. I use my same rule set with trading them that I do with trading ETFs and options. That is I make an initial purchase one day or several the same day, press the trade on additional days and sometimes liquidate the entire position on the same day I made the last purchase. So far the BD I use has not said anything about being classified as a day trader, however I believe the NASD and SEC could make a case for daytrader status but it would be a little flawed and could be challenged.
The previous poster indicated that Etrade has them choose which lot, this is probably because Etrade wants to cover their liability. Perhaps others might be able to shed more light on the subject.
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drew9
171 posts
msg #38128
- Ignore drew9 |
9/21/2005 10:26:24 PM
I am an E*Trade customer and they specifically list on their website what it takes to be considered a Day Trader. As for the lots being sold, they only ask due to the tax consequences. I have held stocks long term and added to my positions. If you sell the lot you recently purchased it could mean the difference between short and long term capital gains. Not many folks on this board probably worry about long term gains but that is the reason!
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