Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

baseballeyeq

Question about trade (stock) settlements...

Recommended Posts

Hi. I am rather new but familiar with a three day period where you have to wait for a stock trade to settle. For example: I can buy Stock A then Sell Stock A, but if I buy another stock I cant sell that until the three days from my first buy are over (because the funds have to "settle"). Does this same 3-day settlement period apply to daytrading? If one wants to buy and sell several times (say 10) in a single day, does there have to be enough "settled" money to cover all of those trades, or am I restricted to the amount of sellted funds/margin that I have available. Does the $25,000-$30,000 account minimum or margin trading have anything to do with being able to trade many times in a day. Basically what I am asking is: can a daytrader (with the account minimum requirement) buy and sell as many times in a day as they would like?

 

Any help would be greatly appreciated. Thanks.

Share this post


Link to post
Share on other sites
Hi. I am rather new but familiar with a three day period where you have to wait for a stock trade to settle. For example: I can buy Stock A then Sell Stock A, but if I buy another stock I cant sell that until the three days from my first buy are over (because the funds have to "settle"). Does this same 3-day settlement period apply to daytrading? If one wants to buy and sell several times (say 10) in a single day, does there have to be enough "settled" money to cover all of those trades, or am I restricted to the amount of sellted funds/margin that I have available. Does the $25,000-$30,000 account minimum or margin trading have anything to do with being able to trade many times in a day. Basically what I am asking is: can a daytrader (with the account minimum requirement) buy and sell as many times in a day as they would like?

 

Any help would be greatly appreciated. Thanks.

 

 

Here is statement from the SEC located here: Day Trading

 

"Under the rules of NYSE and NASD, customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts."

 

 

Once you have the $25,000 account setup you are able to trade multiple times a day without a limit. I believe for some brokerage firms that minimum is $35,000.

Share this post


Link to post
Share on other sites

TradeStation requires $30,000. With TS (and stocks), if you have 4 round trips in any 5 day period, they will classify you as a pattern day trader and request the additional funds to equal $30K. Until you send them the money, they will only let you sell what you own and you cannot buy anything else.

 

Again with TS, if you fund your acct with the minimum, $5,000, you are only allowed 3.5 round trips in any 5 day period.

 

As far as the "T3" rule, it doesn't come into play as much with TS because the minimum non-pattern acct will have a margin equal to the acct balance.

 

The T3 rule goes like this:

Buy X and use all your funds and sell it the same day. You can buy Y with the funds you have coming, the same day, but you cannot sell it until the funds actually clear, three days later. In other words you could be stuck for 3 days holding a stock even if it is going down.

 

T3 Rule and Pattern Day Trading rules are two different sets of rules.

 

On the other hand, trading Futures does not have either rule. You can trade as much as you can stand because everything is settled that day. The catch is that you have to have a seperate stand alone acct to trade Futures. The minimum Futures acct with TS is $5,000. So if you wanted to trade both, with the minimum, you will need $10,000.

 

This is my understanding.

Share this post


Link to post
Share on other sites

So the "T3" rule does not apply to daytraders with $25,000/$30,000 in their account. Therefore daytraders with that balance are able to trade an umlimited number of times during a day without being subject to any "3 day" settlement restrictions. Correct?

 

Thanks for the reply.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ...hallucinates.... Student: “What if we gave the monkey LSD?” Guru: “The monkey already did LSD”
    • Question: To those that had/have cancer, what were the signs that made you think “something is not right here” to make you go see a doctor? Answer: So, 5/25/2018, I woke up, got ready for work, and as I walked to my car, I started gagging. Like something was stuck in my throat and I needed to clear it. And then it went away.   But 10 minutes after that, I was T-boned at 40mph on the driver side door. But what made me see a doctor was while my muscles felt better and bruises were going away, the gagging still continued, I started having fevers, my neck felt swollen, I was having such a hard time breathing, and I'd have random sharp pains in my chest, but not from where the seat belt saved me.   2 weeks after the accident, I finally see an urgent care doctor, who looks me over, tells me I'm fine, but luckily requests a neck X-ray. And I ask for a chest X-ray, which he rolls his eyes but let me have (most of my pain was in the neck, so I understand).   The very next day, he calls and says “So, that chest X-ray shows there's a 4 inch mass on your heart and lungs, and your lungs have been filling up with fluid, as well as in your pericardial (heart) wall. We need you to come in tomorrow.”   Turns out the big mass, due to the accident, caused my heart and lungs to tear and fill with fluid, the swollen neck and gagging was caused by 2 metastasized tumors, and the fevers and weight loss were symptoms. Stage 4b Hodgkin's Lymphoma.   But thankfully, we went very aggressive with chemo (and had a lot of bad side effects that don't normally happen to patients), and now I'm about 16 months cancer-free. Yay lucky X-rays! Rachel Jurina, Quora Source: https://www.quora.com/To-those-that-had-have-cancer-what-were-the-signs-that-made-you-think-something-is-not-right-here-to-make-you-go-see-a-doctor   Profits from free accurate cryptos signals: https://www.predictmag.com/  
    • As a man, the reality of life is the harshest part. I don’t mind looking older or becoming weaker over time; it’s nature.   Have you ever heard that the only people who will be loved unconditionally are women and children? Men will only be loved as long as they can provide until they are no longer needed. It doesn’t matter if you already did your best to get your kids to the best school or get the best things for them, if you stop before they’re done with it, there will be no thank you. The only thing they will remember is that they have to quit school at 15, ignoring all the previous 15 years of life you provided for them. The only people who will accept you, no matter what, are your parents. But in this situation, you might be that ungrateful child.   EDIT: Wow, I didn’t think this would get so much attention.   For those who disagree, I can only say that everyone has their problem. If you don’t get the chance to face such a thing, be grateful. Remember, sometimes what you throw in the garbage is something that someone wishes ever to have.” – ElZee, Quora   Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • The good thing i had noticed so far is that the traderpot value is also on the rise..
    • yup its a gradual rollout the right way in my opinion, its really good and its exciting for the sto in 2027
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.