Quote:
Originally Posted by argee
Hi,
I am new to this forum and investing , so some of my questions may sound pretty dumb/basic.
I just found out that I my account(cash value) has been placed under 90 day restriction for an apparent "free ride".
So here are my questions
1) With the restriction, can I buy and sell stock the same day?
2) With 10K in my trading a/c, say I bought XYZ for 5K and sold it the same day for a profit. The next day, lets say I got ABC for another 5K. Is this legal?
Thanks so much for your time and help!
Argee
|
I guess your 90 days are up and you are day trading like mad?
Free riding - Wikipedia, the free encyclopedia
I have an account with a major broker. They keep my stock certificates, in theory. Yes, there is a 3 day settle period but I can buy XYZ today and sell today, and do it again tomorrow.
These major houses have all the shares you want to buy or sell.
It sounds like you had an account where you would be sent the stock certificate on your purchase and your purchase would take 3 days to settle. So, until settlement you were restricted from selling something you did not own yet. Did you get a broker with your trading firm to explain why you were restricted?
If you did not have a margin account and you bought more stock than your cash could afford, you may have created a Fed. call. Those can get you restricted. A margin account would let you buy $10,000 of stock with $5000. A non margin account, if you had $5000 in cash, you could not buy more than $5000 in stock. If you did this, then someone at your firm may have screwed up. The system should have alerted you that you were exceeding the buying power of your cash.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
