posted
I have just opened an account with E*Trade UK. They offer either a cash or margin account. What are the benefits of either. I wanted to use it for daytrading, but was told I need to have a minimum of $25,000 in my account or I will get a Margin Call. this dosent sound like much fun as I can barely stretch a $1000. Do these day trade rules still apply with a cash account? Any help please. TIA
Posts: 768 | From: Ingland | Registered: May 2004
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A. You buy stock XYZ on the 1st. B. You sell stock XYZ on the 1st. C. You buy stock AAA on the 1st. D. You cannot sell stock AAA until the 4th (3 business days later) or you are in violation of a Nasdaq rule. Stock XYZ takes 3 business days to settle.
If you decide to sell stock AAA regardless of the violation, you need to DEPOSIT FUNDS BEFORE THE 4TH to cover the old stock amount otherwise your account gets flagged with one violation. 2 flags and I believe your account gets banned permanently to ONLY USING cleared funds.
Different brokerages may have slightly different rules. Some may not even give you your funds for stock XYZ until it clears.
[This message has been edited by Phoenixx (edited September 15, 2004).]
posted
You need a margin account for sure. If you don't and you sell a penny you will have to wait 3 days before your money is available to you again. If you don't use margins, only cash even with a margin account you can day trade. The day trading rule for a minimum 25,000 only applies if you are using margins. As long as you use cash only you can day trade. You will still get a warning but can continue. I use Ameritrade so you may want to check that out with E-Trade to be for sure on that one just in case but I thank they are the same.
Again the benefit for margin account is if you sell a stock without a margin account on a OTCBB or Pinksheet you will not be able to reuse that money for 3 business days.
By the way, even if you fall into the daytrading rules of 3 per week its better then not being able to access your funds for 3 days after a sell.
Ric
[This message has been edited by Ric (edited September 15, 2004).]
Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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posted
So let me get this right. I put $1000 in my margin account. I can buy stock X and sell X monday. I can buy stock Y and sell Y tuesday. etc etc all week with a different stock each day I am not breaking any rules as long as it is with my own money? When I registered the guy was practically insisting that I deposit $25,000 as soon as possible.
Posts: 768 | From: Ingland | Registered: May 2004
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