Is Merrill Edge Good for Day Trading? What You Should Know

Have you ever wondered is Merrill Edge good for day trading? You are thinking about investing your manage and have further deal in managing your assets. However, things can be confusing because there are so many brokerage firms out there. Some are really trusted and reliable, but you will have to do an extensive research and finding to find them. Merrill Edge is one of the trusted platforms that you can use to manage your assets.


Merrill Edge – What You Should Know

Before you find out about is Merrill Edge good for day trading, it would be a good idea to learn about the service first. The service was launched in 2010 with its headquarter located in Charlotte, North Carolina. It was created and made by Merrill Lynch, a subsidiary of Bank of America. Bank of America alone is one of the biggest banks in America, having more than $1.43 trillion of deposits – and serving around 66 million of small business clients and individual customers within 35 countries all over the world. Merrill Edge is Bank of America’s trading arm that runs through self-directed mechanism.


Understanding Day Trading

So, what is day trading, anyway? Before you decide is Merrill Edge good for day trading, do you even know what a day trading is? It is the practice of buying a security (and sell it) in one trading day. Day trading can take place in any marketplace, but it is pretty popular (and common) in stock markets and Forex (Foreign Exchange). Reliable and professional day traders are generally well-funded and well-educated.

Is Merrill Edge Good for Day Trading


Let’s say that you buy a stock in the morning and you sell it in the evening, then you are a day trader. Naturally, day trading has some of its benefits, including:

  • You can manage the trade in short time – it can be either in 5 minutes or 15 minutes. The possibility of profit may be smaller than the swing trading, but the numbers of profits actually depend on how active you are in a day. Let’s say that you get $2 for each trade you perform and each of them doesn’t take you more than 10 minutes. Imagine how much you can get in an hour.  Imagine your profits in a day.
  • Day trading is also great for better leverage – compared to overnight holding position
  • Day trading can give you tons of profits too. Yes, they may be smaller but they can be plentiful when accumulated on a longer term.
  • You can avoid overnight risk in which your money would be exposed to many unexpected conditions, such as military condition, political changes, or surprise economic.

However, you need to remember that day trading isn’t suitable for those looking for side-job in investment. Because everything happens quickly, you need to constantly monitor the trade and watch over the price movement. If you want to have part-time investment, you need to do the swing investment – not the day trading.


Fees and Commissions

Merrill Edge is often considered as discount brokers for efficient and reliable asset management. The platform offers unlimited free stocks as well as ETF (Exchange-Traded Fund) trades. They offer trading costs up to $0.65 each contract, but they are limited only to two legs, maximum.

Merrill Edge has its own requirements and regulations concerning the fees and commissions, but all of them are laid out in a transparent manner. If you are interested in their service, you can check further into the website and find out the detailed information. For now, the service doesn’t support any fractional share trades. If you have to break it down, the pricing summary would be:

  • $0 for minimum deposit, stock trades, ETF trading fee, and options (with base fee)
  • $0.65 for options (per contract)
  • $20 for mutual fund trading fee
  • $30 for broker assisted trading fee

Tools and Platforms

Is Merrill Edge good for day trading? Yes, thanks to the handy and useful website. The website can be useful for managing the investment portfolio. The MartketPro platform is handy for active traders but it isn’t perfect for day trading. It means that you can access the website for day trading but not so much with the MarketPro.

The service also offers its own mobile app. It is straightforward to use. It is great and impressive for research too. If you are one of the customers of Bank of America, the app enables you the universal account (and functionality) – which is a winning feature. You should check into the site’s platform and find the detailed info about their offers and features


The Trading Rules at Merrill Edge

The day trading pattern at Merrill Edge is subject to federal regulatory body. So, if you are wondering is Merrill Edge good for day trading, the answer is basically yes – with several requirements and restrictions. Based on FINRA (Financial Industry Regulatory Authority) regulations, broker-dealers in United States must follow the directions and regulations. If you have an American-based account and you want to have a day trade, make sure to have $25,000 of minimum assets within your account. If you don’t, you have to deal with the fact that your account would be blocked for around 3 months (90 days).

There are 3 characteristics for pattern day trading, including:

  • It is a margin account
  • You can place at least 4 (or even more) security day traders within 5 (business) days period
  • The day traders would make up around 6% (at least) of the total activity

Accounts that don’t meet these 3 characteristics aren’t considered a pattern day trading. Because of these factors, some people are able to ‘bend’ the rules and dodge them. Some traders even suggest doing these things to dodge the regulations:

  • As it was mentioned before, a trading account is using margin. A cash account doesn’t have to meet that requirement. So, basically, if you have a cash account and you want to perform a day trading, you don’t have to own at least $25,000 for the activity. But again, if you use cash account, you can’t trade with unsettled funds. If you force it out, your trading experience would be slowed down.
  • Traders also suggest placing 3 (or even fewer) day trades within a week. Due to this trading level, security regulators won’t consider an account to be a day trading account, which means that you can evade the $25,000 requirements.
  • Moreover, who says that you need to have the actual $25,000 cash on your account? You can use different kinds of investments. What about having low-risk $25,000 mutual funds? Of course you can do it too!

It’s a good thing, however, that Merrill Edge doesn’t impose such restrictions on their desktop platform anymore. It seems that they are doing this to enhance the appeal of day trading within their platform. The broker is said to remove the (long-standing) account requirements to get direct access to the MarketPro, its desktop software. But as it was mentioned before, this MarketPro isn’t suitable for day trading – but it is great for other types of trading. In the event that you want to try different kinds of trading, this software can be extremely helpful. The broker also offers several useful tools for day trading (these tools would be proven to be helpful and handy), like right click trade (from a chart) and also Level II quotes.


Final Words

In the end, the decision to choose which broker to be responsible for your asset is totally up to you. It would be best, though, if you can decide what kind of trading to expect from your asset management and work from there. Don’t start out from choosing the platform – or be tempted by the popular name of the service. Understand your own needs and requirements and develop from there. Only by then, you can get the most suitable platform for your needs. And now that you already know the answer to your question is Merrill Edge good for day trading, you should be able to make a better decision.

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