posted
I have a maximum of $8k I can put into an account right now, I use scottrade and was wondering how I can change from a cash account to being able to buy and sell same day and do that every day. I tried doing this without my funds settled with about 10 stocks and I was warned by Scottrade.
So with scottrade or any other brokerage which one can I do with 8k so I can buy/sell every day.
As I have been reading though I dont understand what a 2,000 margin account from ameritrade or others will do for me (suggested by others) instead of a cash account. I currently have a scottrade cash account and wait 3 days for it to settle.
My goal is to be able to buy and sell 1-3 stocks per day about 3-5 times a week without having to wait 3 days for my funds to settle.
I think 25k is needed in order to do that, but I hear with choice trade if I have lets says 8k I can use 2k per stock and buy 4 stocks, sell them the same day, and all those funds will be available to me before the next trading day opens.
Posts: 6266 | Registered: Jun 2004
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posted
Also please keep in mind I dont want anything to do with margin, I want my cash to be used only, so lets say a $2,000 margin account was set up with my $8,000....
If I was to spend $2,500 on stock ABC and then sell it same day for $3,500 can I go right ahead and buy another stock that same day and sell it, since I still have $5,550 of my own settled money? Then the next day do I have to wait for everything to settle or can I do the same the next day, thats what I really want.
Posts: 6266 | Registered: Jun 2004
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posted
if you have $8,000 in your account and you:
- buy ABC for $2,000, - sell ABC the same day for $3,000
your total account value will be $9,000 now. so with a cash account you now have to wait for that $3,000 to settle, which takes 3 days, before you can buy anymore securities with it.
you can use the remaining $6,000 that same day, since you never used it yet.
you can avoid the 3 day settlement by upgrading to a margin account. a margin account will allow you to use the funds you just made (in this case $3,000) as soon as you sell it. so you could use $9,000 that day instead of just $6,000 if you had a margin account.
if you do four or more day trades within a 5 business day period your account is labelled as a pattern day trader and need a minimum of $25,000
Posts: 610 | Registered: Dec 2004
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posted
scott trade robed me or 25 k one time. I had opened an account then tried to open an IRA everything i did in one account they mirrored by shortselling in the other. I lost 25k. and they did not put it back... I use ameritrade.
you can't daytrade with 8k... but most of us I think are using ameritrade. the two draw backs are 25k day trade and waiting on funds to settle.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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posted
I can easily daytrade with 8k meaning just buying one and selling almost every day or multiple ones in a day and then stopping for the week.
ghosty I have a cash account now and know how it works. what I want to know is in your example where if I have 9k in my account can I use that money right after that buy/sell and that money to not be considered on margin, but considered as me just using my own cash?
Also lets say I do a trade monday, 1 on tuesday, and one on wednesday, couldnt I on thursday do another round trip because the funds should have settled from monday in this case?
Posts: 6266 | Registered: Jun 2004
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posted
no, you can't day trade with 8k. the broker requires 25k in cash reserve to day trade. so you would need 26k to daytrade 1k. I received a day trade margin call last week which i talked my way out of because i bought and sold the same stock in a day.
yes, you could day trade with 8k but no broker will let you. but with a margin account and 8k you could buy today and sell tomorrow and buy something different tomorrow with no trouble.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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posted
you can only use the money right after buy/sell if you have a margin account and are buying nyse/nasdaq/amex
I have a margin account and I use it when I play in the big boards... its no problem.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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posted
blue ranger are you sure you can't buy/sell same day with a margin account 3 times a week on the OTCBB or penny stocks, I was always under that impression
Posts: 6266 | Registered: Jun 2004
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posted
I put 2k in ameritrade and it would not let me do anything but buy. sell and wait for settlement..
I rased it to 5k and it got easier but still not to easy.
I applied and got a margin account and now I can buy/sell in the same day and see the money immediately. Today i sold prrm and in 2 minutes i bought gtel.
I sold cnese one morning and it droped so i wanted back in. It let me buy it back but the next day I got a 25k margin call for daytrading. they gave me 1 grace but told me to never do it again. they explained i could trade 4 or 5 times a week but never the same security in the same day buy/sell.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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posted
i added cash a few weeks ago and it took 5 days for it to appear as marginable money and now i am waiting for another 5 days for it to appear as non marginable money that I can buy otcbb with. over 10 business days even with a margin account.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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all i need to know is with a margin account < $25k can I buy/sell same day and buy/sell the next day up to 3 times of this a week? Can I buy/sell and then buy the same stock in a day? Lets say I put in 8k into a stock which is my whole portfolio value and come out with 10k, can I use that 10k the next day to buy and not have this stock considered buying on margin, or can I only use 8k until those funds are settled.
Posts: 6266 | Registered: Jun 2004
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but you started this asking if you could day trade. the SEC considers daytrading buying and selling the same stock in the same day. and to do that your required to keep 25k in cash reserve.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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posted
cleared it all up, with scottrade you can buy/sell same day 3 times in a 5 days. You can buy one day and sell next day as many times as you want. This goes for OTCBB and pinks.
Posts: 6266 | Registered: Jun 2004
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posted
well scot trade is the way to go then. i should switch from ameritrade.
Posts: 1070 | From: louisville,ky,usa | Registered: Oct 2004
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