Day trading is "highly risky" and most people who buy and sell stocks that way lose money, the chairman of the US Securities Exchange Commission (SEC), Mr Arthur Levitt, told US senators yesterday.

"I am concerned that some people may be lured into the false belief that day trading is a sure-fire strategy to make them rich," he told a senate panel.

"It's a casino mentality that brings people to day trading," he warned, while underscoring that day trading "is neither illegal nor is it unethical, but it is highly risky". Day traders seeking instant profits often speculate on minute-to-minute share-price fluctuations without understanding what causes those shifts. Their numbers have swollen recently with the proliferation of stock transactions over the Internet.

The practice made grim headlines in late July after day trader, 44-year-old Mr Mark Barton, went on a shooting spree at the offices of two Atlanta, Georgia, brokerage firms, killing nine and wounding 13, before taking his own life as he was cornered by police. The SEC yesterday posted a new warning on its website about the high risks in day trading.