From: Mike & Barb Tate [mailto:bat@gci.net]
Sent: Saturday, February 16, 2002 9:31 PM
To: webmaster@sec.gov
Subject: rule change re:daytrading margin


   To whom it may concern,

   I’m writing to express some opinions about the recent  change to the margin 
   requirements for what is termed pattern daytraders. The change requiring a 
   $25,000.00 account balance if more than three daytrades are made in a five 
   day period.

   I’ll give you a brief history of my trading experience. When I decided I wanted 
   to learn how to trade I opened a separate brokerage account to trade from. I 
   started with $25,000.00 and a firm commitment not to add any more money to this 
   account. This was the maximum amount I was willing to lose learning to trade. 
   This was about three years ago and to date I’ve lost about half.I never use 
   margin, restricting myself to  what cash I have available.I trade options almost 
   exclusively. I never wanted to daytrade,however ,with these volotile markets I’m 
   not comfortable holding a position for a  long time. I usually position trade and 
   daytrade only when I think there is an opportunity in the market,such as option 
   expiration week. I limit myself to a % of account balance in any one position and 
   a % of that position cost as a loss in any trade. I consider what I’ve lost as an 
   expense to learn. I’ve just started building my account back and find that the 
   rule changes are making it very difficult for me. I’ve lost on so many trades lately 
   as I find  that I’m making trading decisions based on whether or not I’ll get hit 
   with a daytrade. I won’t even try to explain how frustrating this is.

   I’ve thought a lot about this rule and I can’t see how this protects anyone. To me,
   it looks like all that’s been accomplished is to raise the stakes for the small 
   trader. Those that got into trouble daytrading on margin probably shouldn't have a 
   credit card and should be limited to how much money they carry into a casino.I  don’t
   think we have an obligation to pretect the foolish few at the expense of everyone else.

   What I’d like to see is this rule change abandoned and changed back to the way it was.
   I have little hope of that happening, so I’d like to suggest a couple of changes.

   # 1   options trading excluded from this rule, as you can’t buy options on margin.

   # 2   trades not involving margin be excluded from this rule.

   # 3   come up with something a little more lenient than 3 trades in five days to 
   		 become a pattern daytrader.

   Another thing is that one can enter a trade not planning to close it the same day, 
   with the volatile market we have you can easily get taken out on a stop loss order.

   The rule changes have not only affected daytrading but other short term trading 
   strategies as well.

   Thank you for any consideration you might give to this request.Any response would 
   be very appreciated.

               Michael G. Tate

               23847 Hilltop drive

               Chugiak Alaska 99567

                1-907-688-4289

                 bat@gci.net