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Old 02-18-2007, 07:50 PM
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Re: FUTURES is where it's at!
The reason I mentioned this is because over at ScotTrade this policy is in effect.
Quote:
Credit balances in a cash account may be used for purchases.



*

If the account has settled funds, there are no restrictions as to what may be purchased.
*

If the credit balance is a result of an unsettled sale of securities, certain restrictions may apply.
*

Unsettled proceeds from existing long positions can be used to purchase additional securities as long as the new purchase is not sold prior to the settlement date of the original sale that generated the proceeds used to finance the purchase.
*

If it is sold prior to the settlement date of the funding sale without additional funds being deposited, it will be considered a free ride under Federal Reserve Regulation T.



For example, if you sell a security on Monday the 1st, you can use the proceeds to make a purchase prior to the settlement date of Thursday the 4th.



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However, if you make a purchase before Thursday the 4th then sell that new position before the settlement of Monday's sale, you will then be required to deposit funds to pay for the purchase.
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If you purchase on Thursday the 4th, you may place a sell at anytime you wish, since the purchase was made with settled funds.



Mutual Funds and Fixed Income Securities can only be purchased with existing or settled funds.
At Scot I had a what they call a "Cash Account" and that rule applied. At TS I have a margin acct so I'm just not sure that it applies. Now if you have mega bucks in your acct it is not an issue but if you have just enough to get by, it would apply. That is what I have to figure out. Does that rule apply to me at TS?

I own my own business and am not going to give that up so I only want to make a few trades in the morning every other day or so but I would like to be able to make more than the 3.5 trades allowed or be classified as a pattern day trader. I don't have another $25,000 to drop in my trading account right now. I know number of trades does not apply with e-mini's but the unsettled funds rule might. That's the nut.

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