RSS Feeds3 day fund settlement rule.?
I've been trying to figure this one out for ever, and no one seems to have the same answer for this question, but from what i've learned, i derived to this. Example:
3,000$ on Scottrade
Ok, lets say i buy a stock on Monday 1st lets say 2000$ worth of, and then i sell it on Tuesday 2nd (lets assume i didnt not loss or make any money, and lets assume there are no fees). So now i buy stock Wed 3rd, worth 1,500$. With the 3 day fund settlment rule can i do that? with cash or with marginal account, does it make a difference? Do i have to back up all purchases with cash funds?
Pretty much , all im interested is, If i buy a stock on day 1, can i sell the same stock on day two, or even the same day without getting the pattent day trader warning. And can i buy another stock right after i sell the first one(assume i used all my money to buy the first one, and now using all my money to buy the 2nd one)
Normally, with open end mutual funds, you can sell one then buy another the next day, and some brokers allow you to sell and buy same day; however, many brokers will make you wait for settlement to take money out of the account.
Obviously, there are normally stiff fees for short term trading.
The other thing to keep in mind is that very rarely, redemption's in a fund will be limited…you may only be permitted to sell a percentage of what you asked to sell…thus leaving your account short.
The best way to know, is to call your broker; or place a sell order then watch your "cash available for trading" balance.
March 31st, 2009
as long as you have a balance in your account to cover what you are buying you can keep buying and selling. don't worry about the 3 day rule. and they won't let you buy more than you have in your account anyway. you can't buy $5000 worth of stock and only have $3000 in your account. the day trading rule is you can't day trade more than 3 times in a 5 business day time period unless you have more than $25k in your account. if you have more than 25K you can do anything you like anytime you like
References :
March 31st, 2009
Normally, with open end mutual funds, you can sell one then buy another the next day, and some brokers allow you to sell and buy same day; however, many brokers will make you wait for settlement to take money out of the account.
Obviously, there are normally stiff fees for short term trading.
The other thing to keep in mind is that very rarely, redemption's in a fund will be limited…you may only be permitted to sell a percentage of what you asked to sell…thus leaving your account short.
The best way to know, is to call your broker; or place a sell order then watch your "cash available for trading" balance.
References :