Home Upgrade Search Memberlist Extras Hacker Tools Award Goals Help Wiki Contact

Stock Legalities/Requirements (information)

Just thought I'd share some information for stocks when it comes to what's legal and what's not + requirements. THIS IS US ONLY.

Day trading: Defined as someone who makes 4+ trades within a week (5 day business week) is considered a pattern day trader.
Requirements for this: You are required legally to have an account balance of at least $25,000 to do this.
Does not apply to Forex trading


Stock advice: It is ILLEGAL to offer PAID stock advice (fee or flat amount) without specific licenses and applications filled out.
Requirements: https://www.sec.gov/about/laws/iaa40.pdf (read more here)



Margin Accounts: By law MUST have a minimum balance of $2,000.
Requirements: $2,000 to open a margin account.

Will add more if requested.
Should be said that these rules only apply to US citizens, and the first one doesn't apply to forex trading

However, thanks for posting :)
(Feb 25, 2016 04:05 PM)vexius Wrote:  Should be said that these rules only apply to US citizens, and the first one doesn't apply to forex trading

However, thanks for posting :)
I'll add those in, thanks =)
(Feb 25, 2016 03:53 PM)thales Wrote:  Just thought I'd share some information for stocks when it comes to what's legal and what's not + requirements. THIS IS US ONLY.

Day trading: Defined as someone who makes 4+ trades within a week (5 day business week) is considered a pattern day trader.
Requirements for this: You are required legally to have an account balance of at least $25,000 to do this.
Does not apply to Forex trading


Stock advice: It is ILLEGAL to offer PAID stock advice (fee or flat amount) without specific licenses and applications filled out.
Requirements: https://www.sec.gov/about/laws/iaa40.pdf (read more here)



Margin Accounts: By law MUST have a minimum balance of $2,000.
Requirements: $2,000 to open a margin account.

Will add more if requested.

I know you're mainly talking about US but this may be good to add for Canadian residents:

PDT rule does not apply to Canadians at all. No minimum to day trade and no time is needed for the funds to settle (meaning you can trade using $100 an infinite amount of times provided you don't lose and no commissions).

For the advice, you need a license and an entity backing you up in the case that you are held liable.

Margin accounts: I believe it is a minimum of $1000 (lowest I've ever seen on any Canadian broker).
Should post some tax requirements / limitations as well ;p
(Feb 25, 2016 07:12 PM)Kіng Wrote:  I know you're mainly talking about US but this may be good to add for Canadian residents:

PDT rule does not apply to Canadians at all. No minimum to day trade and no time is needed for the funds to settle (meaning you can trade using $100 an infinite amount of times provided you don't lose and no commissions).

For the advice, you need a license and an entity backing you up in the case that you are held liable.

Margin accounts: I believe it is a minimum of $1000 (lowest I've ever seen on any Canadian broker).
This is us stuff only 😝


Possibly Related Threads...
Thread / Author Replies Views Last Post
by cblose23Jul 14, 2019 02:17 PM 5 226 Jul 14, 2019 02:17 PM
Last Post: cblose23
by 2pac-GDec 29, 2013 06:51 PM 1 122 Dec 29, 2013 06:51 PM
Last Post: Terror32
[Stocks] by shinigamiptAug 22, 2013 02:32 PM 11 550 Aug 22, 2013 02:32 PM
Last Post: m0n0p0ly