A picture of bundles of cash

The Benefits of Day Trading

The Most Obvious

Certainly, the most obvious benefit of day trading is that you can make money, and not only can you make money, you have your profits by the end of the day. Financial experts like Matt Krantz of USA Today do concede that a "fast buck" can be made through day trading, though he says this right before he encourages you not to engage in day trading.

Also, John Visscher, of Holloway Financial Management, points out that because day traders buy and sell stock in less than a year, they are taxed in their income tax bracket. Thus, if you make under $40,000, your capital gains will be taxed at the same rate it would be if had waited a full year to sell it. Plus, if you make under $8,350, you will be only taxed at 10 percent of your profits. Thus, there are tax advantages in day trading, if you have a low income.

Insights from an Expert

John Visscher, a partner with Holloway Financial Management of Gainesville, FLA, has been in the financial services industry for over 20 years, and though he does not advocate day trading, he certainly sees the positives which can come from doing it. In this clip, he discusses what investors stand to gain by engaging in day trading.

Other Benefits to Consider

"Another nice thing about day trading," said Visscher, "is that you can do it from anywhere as long as you have a computer and an internet connection." Also, he added that one could make money without actually being employed in the traditional fashion

"Yes, it does allow you to be your own boss, but if you are not careful, you may be looking for a new boss quickly after you start day trading," said Visscher.

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Copyright © 2009 Matthew R. Beaton. All rights reserved