garylroth

60% of futures profits are long term capital gains and 40% are short term. The do have a tax advantage, but not the full amount of the gains.

It's called the "pattern day trading" rule. Wikipedia has a good article on it at Pattern day trader - Wikipedia, the free encyclopedia Here are the key parts: Pattern day trader is a term defined by the U.S. Securities and Exchange Commission to describe a stock market trader who executes 4 (or more) day trades in 5 business days in a margin account, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. Under the rules of NYSE and Financial Industry Regulatory Authority, a trader who is deemed to be exhibiting a pattern of day trading will be subject to the "Pattern Day Trader" laws and restrictions, which is treated differently from a normal trader. In order to day trade: Day trading minimum equity: the account must maintain at least US$25,000 worth of equity. The good side of this is that if you have the $25,000 equity (cash or stocks) in the account the day trading buying power is better. With $25,000 you can day trade up to $100,000 but you better be back under $50,000 by the end of the day and if you keep positions over night it subtracts from your day trading buying power the following day. This applies to a margin account, but not to a cash account. However, in a cash account each trade ties up money for 3 days waiting for settlement. Your broker can tell you exactly how all this works.

A major consideration is the size and type of your account. If you day trade ETF's then you need a min of $25,000 of buying power in the account per the SEC rules on daytrading stock. Futures do not have the same rules. You can day trade futures for the margin requirement which is around $2,500 for the NQ so that is all you need in the account. You can trade ETF's in your IRA, but not futures. IRA's are not allowed to offer margin. If you plan to day trade ETF's in an IRA you have to be aware of settlement restrictions (talk to your broker). Usually you cannot go in and of them all day long like you can in a normal margin account. I trade a lot of the triple leaveraged ETF's. They move fast, in both directions. Since the VIX index can make big percentage moves, the ETF's that track them do too. If the market is crashing, the VXX can easily move more than 10% in a day. The leaveraged VIX tracking ETF's, such as TVIX and UVXY are double the VXX and can move 25% in one day. I am not worried about trading ETF's that have low volume. The company that offers an ETF makes sure the spreads do not get very wide. They make money from that ETF and want to build volume so they keep the spreads pretty tight. One time TVIX got totally out of sync with the VIX index. The volumes were huge and the company (I think it was UBS) decided to not issue more shares to keep up with demand. UBS made a mess of it and personally I took some a big loss on that trade (My bad for not having a firm stop). Decay is only a problem for an ETF that doesn't go anywhere. If you use them for their intended purpose in a trending situation, then they work as advertised and sometimes better. Good Trading.