Buying Power limited for days

[ptacraig]

Newbie question. I recently opened my first account and have placed a couple trades to see how the whole process works. I am surprised to see how long it takes for the sale of shares to be credited back to my account and have the added buying power back. With a small starter account, I am basically crippled in making any purchases until the money gets credited.

Is it normal to take numerous days for the money to return to your account?? Would having a margin account help??

thanks.

 

[bawr]

Quote from ptacraig: Is it normal to take numerous days for the money to return to your account?? Would having a margin account help??

In the US, stock trades settle three days after they are made, so yes, what you appear to have experienced is normal. In your situation, a margin account would basically eliminate the need to wait for the actual settlement of your sale before buying more stocks.

If your account value is less than $25,0000, watch out for this:

http://en.wikipedia.org/wiki/Pattern_day_trader

Make sure you understand the rules and mechanics of the market before you commit real money. This is a necessary, but by no means sufficient condition for succeeding as a trader or investor.