Updated September 02, 2024

Disclosure Statement

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Day Trading Risk Disclosure Statement

Overview

This Day Trading Risk Disclosure Statement is being provided to you in the event your InteractiveBrokers (IB) margin account becomes, or already is, classified as a Pattern Day Trader account. Asrequired by current SEC and SRO rules and regulations, IB will classify an account that effects three(3) day trades within a five (5) day period as a Pattern Day Trader account. (A day trade is a buy andsell of the same security on the same day). The regulations prohibit IB from permitting a Pattern DayTrader account from effecting any transactions unless such account maintains a Minimum EquityRequirement of at least $25,000.

You should consider the following points before engaging in a day-trading strategy. For purposes ofthis notice, a “day-trading strategy” means an overall trading strategy characterized by the regulartransmission by a customer of intra-day orders to effect both purchase and sale transactions in thesame security or securities.

Day trading can be extremely risky

Day trading generally is not appropriate for someone of limitedresources and limited investment or trading experience and low risk tolerance. You should beprepared to lose all of the funds that you use for day trading. In particular, you should not fund daytrading activities with retirement savings, student loans, second mortgages, emergency funds, fundsset aside for purposes such as education or home ownership, or funds required to meet your livingexpenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 ormore will in no way guarantee success.

Be cautious of claims of large profits from day trading

You should be wary of advertisements orother statements that emphasize the potential for large profits in day trading. Day trading can alsolead to large and immediate financial losses.

Day trading requires knowledge of securities markets

Day trading requires in-depth knowledgeof the securities markets and trading techniques and strategies. In attempting to profit through daytrading, you must compete with professional, licensed traders employed by securities firms. Youshould have appropriate experience before engaging in day trading.

Day trading requires knowledge of a firm's operations

You should be familiar with a securitiesfirm’s business practices, including the operation of the firm’s order execution systems andprocedures. Under certain market conditions, you may find it difficult or impossible to liquidate aposition quickly at a reasonable price. This can occur, for example, when the market for a stocksuddenly drops, or if trading is halted due to recent news events or unusual trading activity. Themore volatile a stock is, the greater the likelihood that problems may be encountered in executing atransaction. In addition to normal market risks, you may experience losses due to systems failures.

Day trading will generate substantial commissions, even if the per trade cost is low

Daytrading involves aggressive trading, and generally you will pay commission on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce yourearnings. For instance, assuming that a trade costs $16 and an average of 29 transactions areconducted per day, an investor would need to generate an annual profit of $111,360 just to covercommission expenses.

Day trading on margin or short selling may result in losses beyond your initial investment.

When you day trade with funds borrowed from a firm or someone else, you can lose more than thefunds you originally placed at risk. A decline in the value of the securities that are purchased mayrequire you to provide additional funds to the firm to avoid the forced sale of those securities or othersecurities in your account. Short selling as part of your day-trading strategy also may lead toextraordinary losses, because you may have to purchase a stock at a very high price in order tocover a short position.

Potential Registration Requirements.

Persons providing investment advice for others or managingsecurities accounts for others may need to register as either an “Investment Advisor” under theInvestment Advisors Act of 1940 or as a “Broker” or “Dealer” under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.

Day Trading Risk Disclosure Statement
Overview

This Day Trading Risk Disclosure Statement is being provided to you in the event your InteractiveBrokers (IB) margin account becomes, or already is, classified as a Pattern Day Trader account. Asrequired by current SEC and SRO rules and regulations, IB will classify an account that effects three(3) day trades within a five (5) day period as a Pattern Day Trader account. (A day trade is a buy andsell of the same security on the same day). The regulations prohibit IB from permitting a Pattern DayTrader account from effecting any transactions unless such account maintains a Minimum EquityRequirement of at least $25,000. You should consider the following points before engaging in a day-trading strategy. For purposes ofthis notice, a “day-trading strategy” means an overall trading strategy characterized by the regulartransmission by a customer of intra-day orders to effect both purchase and sale transactions in thesame security or securities.
Day trading generally is not appropriate for someone of limitedresources and limited investment or trading experience and low risk tolerance. You should beprepared to lose all of the funds that you use for day trading. In particular, you should not fund daytrading activities with retirement savings, student loans, second mortgages, emergency funds, fundsset aside for purposes such as education or home ownership, or funds required to meet your livingexpenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 ormore will in no way guarantee success.
You should be wary of advertisements orother statements that emphasize the potential for large profits in day trading. Day trading can alsolead to large and immediate financial losses.
Day trading requires in-depth knowledgeof the securities markets and trading techniques and strategies. In attempting to profit through daytrading, you must compete with professional, licensed traders employed by securities firms. Youshould have appropriate experience before engaging in day trading.
You should be familiar with a securitiesfirm’s business practices, including the operation of the firm’s order execution systems andprocedures. Under certain market conditions, you may find it difficult or impossible to liquidate aposition quickly at a reasonable price. This can occur, for example, when the market for a stocksuddenly drops, or if trading is halted due to recent news events or unusual trading activity. Themore volatile a stock is, the greater the likelihood that problems may be encountered in executing atransaction. In addition to normal market risks, you may experience losses due to systems failures.
Daytrading involves aggressive trading, and generally you will pay commission on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce yourearnings. For instance, assuming that a trade costs $16 and an average of 29 transactions areconducted per day, an investor would need to generate an annual profit of $111,360 just to covercommission expenses.
When you day trade with funds borrowed from a firm or someone else, you can lose more than thefunds you originally placed at risk. A decline in the value of the securities that are purchased mayrequire you to provide additional funds to the firm to avoid the forced sale of those securities or othersecurities in your account. Short selling as part of your day-trading strategy also may lead toextraordinary losses, because you may have to purchase a stock at a very high price in order tocover a short position.
Persons providing investment advice for others or managingsecurities accounts for others may need to register as either an “Investment Advisor” under theInvestment Advisors Act of 1940 or as a “Broker” or “Dealer” under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.
Day Trading Risk Disclosure Statement
Overview
This Day Trading Risk Disclosure Statement is being provided to you in the event your InteractiveBrokers (IB) margin account becomes, or already is, classified as a Pattern Day Trader account. Asrequired by current SEC and SRO rules and regulations, IB will classify an account that effects three(3) day trades within a five (5) day period as a Pattern Day Trader account. (A day trade is a buy andsell of the same security on the same day). The regulations prohibit IB from permitting a Pattern DayTrader account from effecting any transactions unless such account maintains a Minimum EquityRequirement of at least $25,000. You should consider the following points before engaging in a day-trading strategy. For purposes ofthis notice, a “day-trading strategy” means an overall trading strategy characterized by the regulartransmission by a customer of intra-day orders to effect both purchase and sale transactions in thesame security or securities.
Day trading can be extremely risky
Day trading generally is not appropriate for someone of limitedresources and limited investment or trading experience and low risk tolerance. You should beprepared to lose all of the funds that you use for day trading. In particular, you should not fund daytrading activities with retirement savings, student loans, second mortgages, emergency funds, fundsset aside for purposes such as education or home ownership, or funds required to meet your livingexpenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 ormore will in no way guarantee success.
Be cautious of claims of large profits from day trading
You should be wary of advertisements orother statements that emphasize the potential for large profits in day trading. Day trading can alsolead to large and immediate financial losses.
Day trading requires knowledge of securities markets
Day trading requires in-depth knowledgeof the securities markets and trading techniques and strategies. In attempting to profit through daytrading, you must compete with professional, licensed traders employed by securities firms. Youshould have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm’s operations
You should be familiar with a securitiesfirm’s business practices, including the operation of the firm’s order execution systems andprocedures. Under certain market conditions, you may find it difficult or impossible to liquidate aposition quickly at a reasonable price. This can occur, for example, when the market for a stocksuddenly drops, or if trading is halted due to recent news events or unusual trading activity. Themore volatile a stock is, the greater the likelihood that problems may be encountered in executing atransaction. In addition to normal market risks, you may experience losses due to systems failures.
Day trading will generate substantial commissions, even if the per trade cost is low
Daytrading involves aggressive trading, and generally you will pay commission on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce yourearnings. For instance, assuming that a trade costs $16 and an average of 29 transactions areconducted per day, an investor would need to generate an annual profit of $111,360 just to covercommission expenses.
Day trading on margin or short selling may result in losses beyond your initial investment.
When you day trade with funds borrowed from a firm or someone else, you can lose more than thefunds you originally placed at risk. A decline in the value of the securities that are purchased mayrequire you to provide additional funds to the firm to avoid the forced sale of those securities or othersecurities in your account. Short selling as part of your day-trading strategy also may lead toextraordinary losses, because you may have to purchase a stock at a very high price in order tocover a short position.
Potential Registration Requirements.
Persons providing investment advice for others or managingsecurities accounts for others may need to register as either an “Investment Advisor” under theInvestment Advisors Act of 1940 or as a “Broker” or “Dealer” under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.