[Lurkina.n.Learnin]

How do High Frequency Traders get around the +3 in that equation?

[BiglyCommentary]

How do High Frequency Traders get around the +3 in that equation?

Most are members of the exchange, have seats, and the rules are not the same for them. Same as for market makers, totally different rules than for Joe retail.

[BiglyCommentary]

This SEC rule talks to some of what you are asking about. (Warning, another eye glazer)

SECURITIES AND EXCHANGE COMMISSION
17 CFR PART 240
[Release No. 34-63241; File No. S7-03-10]
RIN 3235-AK53

Risk Management Controls for Brokers or Dealers with Market Access

https://www.sec.gov/rules/final/2010/34-63241.pdf

[sheana]

They all have margin accounts.....borrowed money. I traded with a margin account for many years.