Day-Trading Accounts: Approval and Risk Disclosure

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Chapters in this video

  1. 0:00 The promoting trigger versus merely permitting day trading
  2. 1:41 Risk disclosure prerequisite and the $50,000 warning trap
  3. 3:10 Option A approval versus Option B written non-intent agreement
  4. 4:58 The option B catch and rogue customer calendar-day deadline
  5. 6:10 Rapid-fire exam recap

What this video covers

  • The "promoting" trigger that makes the special day-trading rules apply, including ads, seminars, website content, and direct outreach
  • The risk disclosure that must be delivered individually to each non-institutional customer before the account opens
  • Why the $50,000 figure in the disclosure is a warning, not a regulatory minimum balance requirement
  • Option A: the appropriateness determination, including the nine required data points and the family residence exclusion from net worth
  • Option B: the written agreement where the customer states they do not intend to day trade
  • The 10-calendar-day deadline to retroactively approve under Option A when a customer violates the Option B agreement
  • How the approval rule and disclosure rule interact as separate requirements for firms that promote day trading

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