Date:    02/02/2000  12:46 AM


Subject: Comments on Proposal File No. SR-NYSE-99-47
To whom it may concern,
     
In my opinion, the proposed rule change to increase the minimum equity 
requirement in a margin account from the current $2K to $25K for yet to be 
defined "pattern daytraders" is totally ridiculous, unfair, discriminatory, 
unnecessary and counterproductive.
     
If this is being done to "protect" the "small investor", I truly fail to see the
reasoning and the logic behind it. If one has 2K in his account, a "small 
trader"  may buy 100 shares of a $20 stock, or 100 shares of a $40 stock on 
margin. If he has 25K in his account, he may buy 1000 shares of a $20 stock, or 
1000 shares of a $40 stock. If his account is "wiped out" eventually, he will 
lose $2K in the first case, and $25K in the second. Which one is better? Are we 
saying that people with $25K accounts are more knowledgeable, are wiser, better 
traders, or able to withstand the loss of that $25K more than somebody with only
$2K and testing the waters, learning the ropes, or they just chose to invest 
that much for some other reason? And there are hundreds of reasons one may come 
up with why someone would have an account with a small amount in it. I, for one,
have a number of accounts at several different brokers. Why will I have to tie 
up $25K per account just to be able to keep my margin privileges?
     
If somebody's out to gamble and "play" the stock market, this rule will tempt 
them even more and will have just the opposite effect of "protecting" them. 
"Heck, I was gonna play with $10K , but they want $25K for a margin account, so 
here is another $15K I can blow, if I'm gonna drown, lemme drown in a big 
pond!!" This rule will just cause the ignorant, the stupid, the high roller, the
gambler to lose even more, but lose they will. If they can not trade on margin, 
they will go bankrupt in 4 trades instead of 2. They will just buy a $10 stock 
instead of a $20 stock. If they are really determined, they will beg, borrow or 
steal that additional $23K.On the other hand, the responsible, the experienced 
and/or talented, and successful traders/investors who know what they are doing 
will be denied a lot of opportunity, they will suffer undue and unnecessary 
inconvenience and additional financial burden.
     
And also, why are the "pattern daytraders" - whatever that means, are being 
singled out and discriminated against? Contrary to popular and well-spinned hype
and misinformation, daytrading, if practiced properly, is the SAFEST way to 
trade. The people who get the margin calls are the "investors" who hold a stock 
indefinitely, taking all the overnight risk, not disciplined enough to take a 
small loss, those people whose short term trades turn into long time 
"investments" as soon as they show a loss. The risk and probability of adverse 
news, events, movements, etc. against one's position increases exponentially 
with holding time as anyone can tell. Now, how is a daytrader, who, by 
definition, is flat at the end of the trading day, and probably only holding a 
position for hours or even minutes is prone to a margin call and at the risk of 
wiping out his/her total account? How can daytraders be blamed for the extreme 
valuations of some Internet stocks, when they sell what they buy at the end of 
the day and are flat? These stocks kept running and running, and some of them 
are still running, others became so extremely "overvalued", but stayed at those 
lofty levels for weeks, months. Somebody must be buying these and also HOLDING, 
not selling! I can assure you, they are not the daytraders!
Those people who are buy & hold type investors should be the ones subject to 
more stringent margin rules, NOT the daytraders.
Daytraders provide a huge and invaluable source of liquidity for the markets, 
just look at what happened to spreads on NASDAQ stocks since the advent of 
daytraders, e-trading and the empowerement of the small investor/trader.
     
I certainly hope that cooler heads and wisdom will prevail at your esteemed 
organization, and SEC will once again champion the cause and well-being of the 
small investor  and consequently, the economy of this great nation by rejecting 
this absurd proposal and keeping the investment arena level, fair and free.
     
Sincerely yours,
     
Levent Erbora