Here is my understanding of a "free ride".You buy company "a" for $10 and sell company "a" for atleast $10. It will take 3 days for the funds to settle from the sale of company "a". You are allowed to turn around and buy company "b" for lets say $10. Now, if you sell company "b" before the settlement of comapany "a" then that's a free ride!
Please correct me anyone out there if I am wrong. But this is what I just just did with IBIZ. I sold ibzt and bought gzfx. Now I have to wait for the funds to settle from the sale of ibzt before I can sell gzft. My account has not been flagged, so I assume I am ok.
The bad thing about this is if the stock starts to tank before the settlement of the first stock, then that's a problem. I should have waited for the funds to settle before I bought a new stock.
Hope this makes since. Happy trading.