Subject: Do Not Addopt The Proposed Rule!
Author:  "Babcock; Bryan" 
Date:    02/14/2000 12:54 PM
     
     
These comments pertain to the proposed rule change on Margin.
     
     
The proposed rule changes should not be adopted for the following areas:
        4:1 Margin
        New Call Calculation to Include Aggrigate Trades For The Day 
        Meeting Calls Immediately
        Money Timeing
     
The primary purpose of the proposed rule change is stated to be the control 
of risk for trading. Unfortunitly, the proposed rule does not accomplish 
this task and infact will increase risk for some while being purley punitive 
to experienced traders.
     
The proposed rule increases margin to 4:1. This would allow inexperienced 
traders the ability to open stock far in excess of current amounts. I 
beleive that this is not in the best interest of the trader or the brokerage 
firm (Who is responsible for accounts that may go negative.)
     
For experienced traders the rule is punitive. An experienced trader usually 
has money in interest bearing accounts to cover day trading calls that may 
arrise. The proposed rule intentionally hurts active traders by changing 
margin call calculations to include all trades for that day. This is totally 
contrary to the stated purpose of the rule change. Traders may enter and exit 
positions several time during the day. This in and out movent actually 
reduces the traders risk by allowing the trader to take small losses with the 
ability to reenter the position or reverse position. The propsed rule yields 
an incentive to hold a position to reduce the potential for a margin call.
     
In addition, it does not make sense to calculate margin calls on the 
aggrigate of trades for the day. What does that have to do with money used. 
The  only logical margin call calculation would include the highest amount 
of capital used at any given time.
     
Traders need time to arrange for money transfers to cover calls. The 
proposed rule is not realistic and is punitive to traders and investors. In 
addition, the rule will not reduce the risk to traders, it will force 
traders to be less diverse by pooling cash in my trading account. This will 
leave less money for long term investments therby increasing my overall 
risk.
     
As a successful day trader with several years expeience, I firmly believe 
that the proposed changes would increase risk to traders and should not be 
adopted.