posted
Because a security was sold that had not yet been paid for, this account will only be allowed to make purchases using settled funds for the next ninety days. Learn more about this restriction.
posted
jca it sounds to me like you commited an S.E.C. trading violation. Its called taking a free ride.
The rule states that when you sell any stock you have to wait for the funds the settle or clear before you can use them to buy another stock. If not they restrict your account for 90 days....meaning you can't buy any other stocks before the money clears.
The clearing process takes three business days. So if you sell a stock on Monday, you can't use that money again until Thursday.
You probably used the money to buy and sell another stock before the three day settling period. Sorry friend this happened to me too way back when I was a new and inexperienced trader.
You can still trade though. You either have to wait till the three day clearing period or put more money in yopur account if you want to make another trade right away. This will happen for Ninety days...Thats the Government's rule....Good Luck$$$$$$$$$$$$$$$
quote:Originally posted by jca_1986: Because a security was sold that had not yet been paid for, this account will only be allowed to make purchases using settled funds for the next ninety days. Learn more about this restriction.
posted
I use ameritrade and do that all the time never had a problem.I don't wait three days.Once it says the order went through it shows that cash available for trading.got me and i dont have a margin acct.
IP: Logged |
posted
You are on the right track, but I don't think you are completely right. As far as I know, if you have a settled stock, you can sell that and buy another immediately. However, you must then wait for the funds to settle (3 days) to sell that stock. So basically, if you are in one stock and want to switch to another, when you make the switch you will need to hold the new stock for 3 days.
The best way to avoid this problem is to start a margin account. However, if you do this, you must make sure you are not using funds you cannot back.
posted
Now you need to remember that you can not use margin to daytrade. You can daytrade with margin account within two rules. One is you I can only daytrade 4 times (I believe its 4 and that is a buy and sell on the same day of the same stock) in a 5 day trading period. 2nd only use cash and you won't fall into the daytrading rules of a margin account. If you use margins and daytrade more then the 4 times in a week you will run into the same penalty your in now. Of course I am only talking about a account with less then $25,000. Over $25,000 you can daytrade all you want.
posted
You can still trade with unsettled funds however if you buy and sell the same stock before the money is settled you must bring your broker the principal amount of the stock purchased within 5 days to avoid a penalty.
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The problem is I don't have 25K to do that with. I am only 18 and was just trying to get my feet wet with the daytrading. I have been doing research for about 4 months now and I am going to attempt to graduate college as a stock analyst. Is there any account I can open with about 2 - 5 thousand so I can get into this whole daytrading thing
posted
Its a SEC thing. It was meant to protect you and the broker. But you still need a margin acount if you can get it. Just don't use the margin (a margin is a loan from the broker to buy more shares then you have money to buy. Pennies are not marginable anyway). As long as you use your own cash and not the brokers you will be fine.
If you don't use a margin account you will always fall in that 3 day settle situation.
Ric
[This message has been edited by Ric (edited October 15, 2004).]
If you are going to daytrade then I recommend that you follow some live action with experienced traders in a quality chat room. Daytrading via stocks picked from message boards like this one is more difficult. Also, the key to daytrading small caps and the OTC is understanding the difficulties you will have getting your orders filled.
If you are going to daytrade then I recommend that you follow some live action with experienced traders in a quality chat room. Daytrading via stocks picked from message boards like this one is more difficult. Also, the key to daytrading small caps and the OTC is understanding the difficulties you will have getting your orders filled.
Yeah, be careful about that if you get involved in pennies. When you buy into the big gainers, when profit taking happens what was once a 200 percent gain can drop rather quickly. If you buy on the rise, you need to try and pick and exit point and stick to it, don't get greedy! Also, remember that corrections are inevitable.
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