7/24 Stock trading question: If on Monday I sell FOO for $20000 and
on Tue I buy BAR for $10000 with the "unsettled" money from
the Monday FOO sale, the only complications are if I sell BAR
before the FOO settlement on Wed/Thr, right? If I hold BAR
until after the FOO settlement, then there is no issue on a cash
account? Also, if I transfer in $10000 after the purchase on Tue,
does that remove the restrictions?
\_ Just trade on margin and forget all these complications.
"I don't know."
\_ Why not just convert your account to a margin account? I
highly recommend it. It costs nothing if you don't buy on
margin. The trade will settle T+3, which is Thursday. In a cash
account you can buy BAR, but you cannot sell it before
Thursday. If you deposit additional funds before Thursday
and sell BAR before then you will get a "good faith" violation.
Three in one year will result in your account being placed on
restriction. If you don't deposit the funds at all you will be
freeriding and you will be restricted immediately. What did your
broker tell you? I'd go with what he said. You are paying
him for this advice. I used to worry a lot about all of this
stuff and my trading was really inflexible, but now that I
have a margin account I don't even think about it. |
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