vegasthegreat

Oh, and just to be sure I always login to loyal using a stateside VPN IP. And I have changed CC's four times on one account now, I really think that as long as you aren't buying/selling same day or logging in from a foreigh IP you are fine. For those of you that dont have accounts with trading companies like Ameritrade, Scottrade, etc., what you may not realize is that probably the two most vigoruosly enforced rules the FTC (I assume the FTC) has regarding trading accounts:

1. Must have a PHYSICAL stateside address - Loyal3 is probably using your foreign IP activity to descrimanate against you in order to keep heat from the Feds at bay (stay in compliance). Occasionally is fine, some folks travel international for work, I have accidently logged in sometimes outside my US VPN IP but no issues yet.

2. A "Daytrader" is classified by the FTC (again, assuming its the FTC, its certainly SOME Fed organization) as anyone that buys and sells the same holding on the same day 5 times or more within 5 trading days. (So stay away from buying/selling same day in Loyal as this could be what they are looking to enforce if you have an account with a warning and you think it is due to rapid buying/selling). If you have a namebrand brokerage like Ameritrade, every time you login, if you have ANY same day buy/sells within the last 5 business days, a warning pops up, and it alerts you to the fact that if you break 5 in 5 days you are considered a daytrader and MUST have a minimum account balance of 25k$. Just steer clear of same day buy/sells, so watch your transaction dates on cc buys as they are delayed.

SammySpade

Its the 4th daytrade within 5 business days that triggers the pattern daytrader rules. You can only have up to 3 roundtrips in 5 days if you have less than $25k. Once or twice a week is enough for me with this company.

I always use a VPN too just to be safe, based on some other data points.

Bttc

Could it be a good faith violation from unsettled funds?

vegasthegreat

Looked up FINRA and the SEC and did find it to be four as you stated Sammy. Wonder why Ameritrade is telling me not to worry about it till I hit five...

Applies to margin trading and a cash liquidity requirement for the trader. I don't know the law word for word but I suppose it could be seen as applicable in this case by loyal if using a cc to fund your buying.

ChessMaster1

I just made some easy money in 5 days...this is so easy

vegasthegreat

Not sure I'd call it easy. It has involved a lot of time researching for me and trying to time certain moves. Seems like less effort anyway then I was putting in when doing the vr thing, I would just remind you, you haven't actually MADE the money until you sell!

heyeaglefn

Did you buy and sell already? Because you haven't made any money until you sell.

shingu79

Err, from my personal experience, it's impossible to be caught up in such rules via Loyal3. First off, if you purchase via CC, it takes about 2-3 business days for the actual trade to occur. When you sell, it takes another 2-3 business days for funds to be released (settled)
I don't see how you can fall into the "day trade" with them.

vegasthegreat

Here is what you are missing:

When you put the sell order in, if prior to 2pm Eastern, it goes through the same day, DOES NOT matter that it takes multiple days to cash out to your account and more time to EFT to your bank. SEC and FTC are interested in the TRADE portion alone, so it's not unfeasible that in order to avoid the hassle and the additional paperwork and additional scrutiny that if you end up buying and selling on the same day brings, they may use that as criteria to give your account extra attention.

Look at the platform, I think Loyal is trying to avoid any additional "special" filings involved with trading, things like limiting you to 2500 dollars per stock per month, monitoring your IP, monitoring your cc used, these are all things that COULD be solely targeted at maintaining a certain business model that allows them to offer you stock for free while minimizing their liability when it comes to reporting to the SEC and IRS.

shingu79

Data point :

Placed order for $2500 worth of GOOG on 4/28/2014 via credit card.
buys 4.7091 at 530.89, which I take was executed on 4/30/2014.

Problem is...Day's range is 522.52 - 528.00 on 4/30/2014.
In fact, the last 5 days, GOOG has not breeched over $530.00

So can we ascertain that they are in fact purchasing and selling above and below market price to "profit"?
And if so, is this legal? considering that they clearly show that there are no "fees" for trade, but in fact, is built in to the trade.

gunner725

shingu79,

Google recently had a stock split and you are no longer able to buy GOOG on loyal3. You bought GOOGL which has a range of 529.09 - 536.34 for 4/30/2014. The buy/sell price you usually get tends to hover around the 2:15-2:30 time.

kingdeuceoff

If you're looking for a stock that has very little variance....KO.

shingu79

ahh....THAT makes sense.

Thanks for that!

JoeFlyer

I used Loyal3 after setting up a Google Spreadsheet that automatically tracks all of the stock tickers listed on the platform.

It take 3 business days to fund so you order won't be placed until the morning 3 business days after you place the order

WATCH OUT once you add your checking account information. Like PayPal, your new default setting is to pull money from your checking account. Once you click purchase, it cannot be undone.

I had $70k of stock purchases in 10 days. Most days, I would sell the stock same day if it was over the original purchase price at 1:45 p.m. I would hold stocks under the purchase price. I made $1k this way in cash and $1400 from the credit card spend (Barclays money and points earned valued at $.02 per point).

Money was ready to transfer out of the account at 3 business days after the sale. Funds could be transferred out at a rate of $15k per minute -- their system takes a minute to believe you are not making a duplicate order.

It all seemed too good to be true -- and it was. My account was closed. If I had Googled Loyal3 closed account, then I would have found this thread.

What would I do differently? First, I would only do spending on new cards. This is a PHENOMENAL way to hit the threshold on a new credit card.

Second, I would hold the stocks for at least 30 days. Maybe that is the magic number? If I stuck to the fundamentals of tracking averages and buying "value" companies on the lower end of their 52 week range (below the midpoint) with solid PE ratios it should be safe for me.

Third, I would cycle the money and pay off the card before the 60 days that the statement is due.

Finally, I would buy stocks that have the hearts on them -- those are the only stocks that Loyal3 receives an additional fee from the companies selling them. That supports their business model. I did that even though they were not the safest stocks, but I wanted to support the platform. It paid off for me because I was doing short-term trades.

I hope Loyal3 puts their trading guidelines out on their site because I would be a good customer following their rules. In the meantime, I really recommend to my fellow FlyerTalkers to think with the following mindset: if I buy and sell too quickly, then my account will be closed. That will set a much higher bar for how you trade on the platform.

TheGreatMongo

you got extremely lucky. in this market, i wouldn't go long any stock including aapl, msft, wmt. .... could hit the fan anyday now. we're at an all time high and still no jobs.