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Finance: What is a Day Trade? 2 Views

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What is a Day Trade? A day trade is a trade done in the public markets where the buy and the sell are both done on the same day, thus marking the net profit or loss on the trade. As long as the account had sufficient margin to make the original purchase, settlement is not an issue. As long as no significant losses on the day were incurred that would impact margin balances, multiple day trades could be conducted on the same day, which is how the majority of successful traders make their living.

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Transcript

00:00
Finance, a la shmoop. What is a day trade? Ding-ding-ding-ding-ding, spin the wheel
00:08
roll the dice, craps, hit hit hit, damn twenty two I'm [Casino games being played]
00:13
out. Okay so day trading well a bit quieter than a Vegas casino blackjack
00:18
thingy there.. Yeah well this was how it felt when he bought Amazon at a thousand [Guy looking tired staring at a computer]
00:23
two hundred and sold at eighteen minutes later at a thousand two oh eight, woot

00:27
sorta eight bucks and profits in 18 minutes for doing a whole lot of this.. [Finger clicking a mouser over and over]
00:32
Well day trading is just that, trading stocks back and forth in a given day
00:36
hoping to make more than you do while driving for Uber or Lyft and knowing [Guy looking excited driving a car]
00:41
that you're one click away from Easy Street or the poorhouse. Well day trading [Old battered house with smashed windows]
00:45
is a relatively new thing before computers got cheap and fast and
00:49
everywhere. Commission's on trading stocks were really high like [Stock ticker showing prices]
00:53
prohibitively high like 40 bucks a trade or more high so you couldn't day trade. [Red cross over computer screen]
00:57
But with the advent of online trading traders can now buy more or less all the
01:02
trades they can eat for less than a hundred bucks a month and all that's [Guy handing over money to the computer and getting lots of stocks]
01:06
great if you can sustain wins again and again in the world of day trading and [Dollar signs coming off the guys computer]
01:10
even if you do win all those winnings are gonna be taxed at the very high
01:14
ordinary income rates so you'll be giving something closest to half of your [Pie chart showing taxation]
01:19
gains back to the government, and that's assuming you're a relatively rare winner
01:22
like most people lose at this. Lots of people got rich owning Amazon for twenty
01:27
five years same with Google and Facebook doing
01:30
nothing like no trading just owning. But very very very few people in history [Pots of gold at the end of the 25 year timeline]
01:34
ever got rich from day trading, oh except one yeah that guy he's the [Guy holding a huge sack of casino chips]
01:39
house...
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