View Full Version : Very green here need some info on when funds are available
I have been watching a stock for some time and it like most stocks has a trading range of approx $.25 between its high and low of the day.
On Day 1 if I buy 1000 shares of XYZ stock at $5 a share in the a.m. then sell those same shares on the same day making a small profit off of that intraday high and low (theoretically $250 profit) can I do the same trade on Day 2? Before you answer read on...
I understand there is 3 days for settlement but since I wouldnt be looking to take literal possession of the money (initial $5000 investment) via withdrawal, request a check issued etc could I trade on that same $5k (1000 shares) to buy and sell XYZ on Day 2?
(note this is not a margin account either, just a basic individual acct)
No, you can BUY with unsettled funds, but you can't sell until the purchase is technically paid for (when your original sell settles).
So, for example, if you originally bought/sold on Monday, you could buy again on Tuesday, but you can't sell those shares until Thursday (without getting a slap on the wrist). This is assuming you're using the same money over and over again. If you use just a third of your money, you could buy/sell one day, then use another third of your money the next day, etc.
You may also need to be concerned about running afoul of day trading rules, which require a $25,000 balance in your trading account.
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