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Active traders must be familiar with the following concepts and agree to follow all NASD or Exchange rules governing:

SHORT SALES
The term 'short sale' means any sale of a security, which the seller does not own, or any sale, which is consummated by the delivery of a security, borrowed by, or for the account of the seller. Per NASD Rule 3350, the Short Sale Rule, one cannot effect a short sale for the account of a customer or for its own account at or below the current best (inside) bid when the current best (inside) bid is below the preceding best (inside) bid in the security. In addition, the NASD has determined that in order to effect a 'legal' short sale when the current best bid is lower than the preceding best bid the short sale must be executed at a price of at least $0.01 point above the current inside bid. For stocks hard to borrow, short sales must be preceded by a request to FD de Leeuw et Associés, Inc., Trade Desk America to make sure stocks can be borrowed. We, in turn, will call Penson Financial Services's Stock Loan Department to ensure the availibility of the stock. If approval is granted by North American Clearing Stock Loan Department, FD de Leeuw et Associés, Inc., Trade Desk America will inform you that the stock can be sold short. If approval is not received, the security in question cannot be shorted. You may submit a list of 10 stocks that will be submitted automatically every morning for short locates. If you short a stock not on the list, and you have not called FD de Leeuw et Associés, Inc., Trade Desk America for a locate, the transaction will be cancelled and you will be responsible for any losses incurred. Short sales made on stocks not located will result in a buy-in. All trades that violate these rules will be put into FD de Leeuw et Associés, Inc., Trade Desk America error account. All losses will be charged back to your account. You will not receive any profit from these trades as they are illegally gained. Repeated violations of these rules can result in your account being closed. Assuming the security in question can be shorted, the short sale must take place as 'sell short'. If the trader uses a sell to place a short sale or over-sells a position, it is possible that the trade will be executed on a downtick. This is a violation of NASD Rule 3350. The trader is responsible to cover immediately the position with a corresponding buy. These corrections must be reported via e-mail back to FD de Leeuw et Associés, Inc., Trade Desk America at the end of the trading day.

MARGIN
There are 2 types of margin - Overnight (2:1) and Day Trading (4:1). Overnight buying power is limited to two times the equity at the end of the preceding day. Positions above two times equity will result in a margin call. You have 3 business days to cover an overnight call by either sending in cash for the amount of the call or liquidating twice the amount of the call. If you do not cover the amount of the call within 3 business days, FD de Leeuw et Associés, Inc., Trade Desk America will liquidate your position. Day Trading buying power is applied to stocks that you day trade (buy and sell in the same day). For accounts with equity above $25,000USD, the margin is set at 4:1. There is no limit on the number of trades. Note that overnight positions must not exceed 2:1.

For accounts under $25,000USD, buying power is set at 2:1, and there is a limit of 3 day trades per 5 days period. Note that overnight positions are not affected by this limitation. It is the client responsibility to abide by these rules. The electronic order entry systems provided to you by FD de Leeuw et Associés, Inc., Trade Desk America cannot do this on your behalf.

Day Trading buying power is set at the beginning of the day and cannot be increased for the remaining of the day (covering overnight positions will not increase this number). For account maintaining a minimum equity of $25,000, buying power is up to four times your equity unless you have overnight positions in which case buying power will be computed as follows: 30% of short positions and 25% of long positions, less both figures from equity and double what is left over.

You will receive a margin call if you go over your day trading buying power at any point during the day. This call must be met with cash only within seven business days. If you miss more then 1 (one) day trading buying power call North American Clearing FINANCIAL SERVICES WILL CLOSE YOUR ACCOUNT.

FD de Leeuw et Associés, Inc., Trade Desk America will e-mail you with any margin calls you may receive. The e-mail notification will be the only notification you will receive from us pertaining to margin calls, so please make sure you review your e-mails everyday. All of these rules must be strictly adhered to. North American Clearing may choose to stop extending any credit at all for repeat violators.

EQUITIY REQUIREMENTS
The amount of equity required to open a day-trading account is $25,000 USD. If your equity drops below this amount you must deposit additional funds to get your equity back up to $25,000. If you do not maintain the minimum equity, your account will become a regular margin account with buying power equal to the cash in the account and limited to 3 day-trades in a five day period. Position held overnight do not count as day-trades. Also please note no check or wire transfers can be sent out unless there is excess of at least that amount in margin figuration.