Thread: Is this a Good faith violation?

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  1. #1

    Default Is this a Good faith violation?

    Is this a Good faith violation?

    On Monday morning, Cash available to trade = $20,000.00

    On Monday morning, customer buys XYZ stock for $10,000.
    Later, on the same day, customer sells XYZ stock netting $10,500 in cash account proceeds.
    Later, on the same day, customer buys ABC stock for $20,000.
    Later, on the same day, customer sells ABC stock netting $20,500 in cash account proceeds.
    (Now, Cash available to trade = $21,000.00)
    Later, on the same day, customer buys ABC stock again for $20,000.
    Later, on the same day, customer sells ABC stock netting $20,500 in cash account proceeds.
    (Now, Cash available to trade = $21,500.00)
  2. #2

    Default

    Some of the others might answer your question as I am a little confused by it. First right off, you are not going to be able to spend 10k and make 500 off of it in one day. I can spend 120k and make 500 off of it as I have done that 3 or 4 times a day here.
  3. #3

    Default

    What you're doing is daytrading. If you're in the U.S., then you're done trading for the entire week, because one more trade and you'll have broken the law. Why? Only 3 daytrades are allowed in a five-day rolling period unless you have more than $25k cash.

    Also, if you happen to have a cash-only account (and I don't know why you would if you have $20k to spend), then you're also guilty of free-riding which is an additional big no-no.

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