Hi -
I decided this week off work to play around with day trading using a margin account. I traded mostly the same stock symbol, and made dozens, maybe over 100 separate trades in the same day. I made sure the day ended and the market closed each day with no open positions on my 'day trading' symbols (I have some long term symbols i've been holding in the account).
So as an example, I bought 750 shares of MSFT for $305.07. A few seconds later I sold it for $305.15. Profit of $60. Every 4 or 5 trades I might lose (I buy at $305.15, and set a sell order for $305.20, but instead it drops to $305.10, and i sell then to cut my losses).
I've probably done $60,000,000 in trades this week, but only made a net profit of ~$1500. I've gained about $10,000 and lost around $8500 this week. So many trades that I have to register as a "Large Volume Trader" with the SEC. Millions of $ trading (out of my margin account), but only a few hundred dollars a day win, if that.
Again, even though i'm in and out of the same symbol 100+ times a day, i never hold a position overnight.
So just to summarize:
- I do large volume of trades and large trade $, but very small wins. about 80% of my trades are wins.
- I never hold any of my 'day trade' positions overnight - ever. I'm in and out within 10 or 20 seconds
- There's only one symbol that I day trade with. I have no long term holdings in this stock
- The other stocks I have on my portfolio are all long-term holds (multiple months)
- This is not my full time job; it's something i do on the side.
I'm familiar with the concept of $3000 maximum capital losses for the year (in fact i'm in that process now - had $7k in losses in 2021, so taking $3k 2021, $3k 2022, and $1k 2023).
Just want to figure out if i'm going to get taxed on my true net gains (i.e - end of the year i have $2billion in trades, $500,000 in gains, and $475,000 in losses, my 'net gain' would be $25,000) - or is it going to be something else?
Thanks so much!
