What you may not know is that in certain circumstances you can receive
a type of margin call known as a "day trading call". The purpose of
this email is to alert you to this possibility and describe the
conditions in which they might arise.

What is a day trading call?
Although you may not consider yourself a day trader, all Datek
customers are subject to NASD regulation, which includes being subject
to a day trading margin call.

A "day trade" is when you open a new position and then close it during
the same trading day. But merely executing a day trade does not
necessarily create a call. Day trading margin rules are applied only
to accounts that exhibit a pattern of day trading, which is defined as
making three day trades within any 12-month period.

Once an account has been identified as a day trading account, a day
trading call is created if the opening transaction of any subsequent
day trade exceeds the account's day trading buying power.

What is my day trading buying power?
In most circumstances your day trading buying power will be equal to
the buying power displayed on your portfolio page. However, there are
some situations where that is not the case. Two examples will help
illustrate this:

1. If you begin the trading day with an existing position in your
account, and you then sell that stock, our Portfolio page will
calculate your buying power according to the rules for positions
held overnight. This might overstate your buying power for day
trading purposes.

As a general rule of thumb, your day trading buying power is the
lesser of:

a) The buying power shown on your Portfolio page, or

b) 75% of the value of your long stock value
Less 130% of the value of your short stock value
Less your margin debit balance (or plus your cash credit balance)
>>Then multiply the above sum by two.

2. If you begin the day with existing buying power and do not
liquidate any positions held over the previous night, then your day
trading buying power remains fixed for that entire day, equal to the
buying power shown on your account at the start of the day.

The important fact to recognize from this rule is that profits from
day trades do not contribute to your day trading buying power during
that day.

How do I satisfy a day trading margin call?
A day trading margin call must be met with a deposit of funds, or of
securities having a "loan value" at least equal to the call amount. A
day trading call is due within five days. Liquidating securities will
not satisfy a day trading call.

What happens if I don't satisfy a day trading margin call?
Unlike most other types of margin call, we will not liquidate
securities in your account to satisfy a day trading margin call. You
should not however regard this fact as meaning that meeting the call
is not important.

When you do not satisfy a day trading margin call with a deposit to
your account within five days, your account will be charged with a
"strike", indicating that you did not meet the call. If you
accumulate three strikes within a 12-month period your margin trading
privileges will be suspended for 90 days.

If your margin trading privileges are suspended you will either be
restricted to trading with only the cash balance in your account, or,
if your account has a debit balance, restricted to closing
transactions only.

This is a complicated matter, and one that requires your diligent
attention. If you have any questions about your margin account,
please send email to support@datek.com.

Thank you,

Datek Online Brokerage Services