Earlier in the day I had about $700 in one stock which I purchased in the morning. I had about $100 sitting around not invested in anything. Later today I sold this stock which left me with no money in the stock market and about $800 to trade with.
Even later on I tried to buy $300 worth of a different stock and it would not allow me to do this. I got the following message:
"This account has insufficient funds to process this order. Please review the account balance, positions, and/or open orders. Should you have any questions, please call customer service."
It said I could only use the $100 that I had not done anything with for the day.
The thing is I did have "sufficient funds" to buy what I was after. I then proceeded to call choicetrade and they told me that the $700 that I sold earlier is now "unsettled cash" and that I would not be able to use this for 3 days. He said they or just now enforcing this "rule" because I was able to buy and sell in this same manner before with no problem. He also said that If I got a Margin account then I would be able to buy and sell as much as I wanted and as quickly as I wanted, he says its the rules that come with having a "cash" account. BTW a margin account is a $2000 minimum to open one.
I am somewhat confused and would appreciate some advice from anyone, this is also very frustrating. As now I have to sit on my hands for three days and any other time I make a trade.
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posted
Could you explain to me the difference between a cash account and a margin account? I really hope this "rule" does not last. The annoying thing is that I was able to trade as much as I wanted to before today.
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Margin you are borrowing the money to trade...if you open a account for $2,000 they usually give you another $2,000 to trade on loan so to speak...when someone has major losses you will hear the term "margin call" ... which means you need to put money in your account to cover what you borrowed and lost.. cash is just Cash.. but anyways that 3 days rule is in effect in most if not all brokerages.. though sometimes Choicetrade doesnt follow it.. ive never had the 3 day rule on me but im sure sooner or later i will..
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