IRA margin account at IB: Still have to wait 3 days to settle?

F

FL_Panhandler

Do you still have to wait 3 days for your trades to settle in an IRA Margin Account at IB?

From IB's website:
"US resident customers may open cash or margin Individual Retirement Accounts (IRA). IRA margin accounts may never borrow, but are afforded all the other benefits of a margin account such as the ability to day trade,......"

If anybody has an IRA Margin Account at IB, I'd appreciate hearing how freely you actually can trade it. Thanks.
 
As long as you have at least $25,000 in your IRA account to avoid the PDT rules for equities you don't have to wait 3 days to settle. For futures you don't even need the $25,000, as there are no PDT rules.
 
IRA margin accounts may never borrow, but are afforded all the other benefits of a margin account such as the ability to day trade. The three day settlement rule does not apply. You may sell and buy using the proceeds just as if it were a margin account.

Pattern day trader rules may or may not apply. A Pattern Day Trader (PDT) is someone who effects 4 or more Day Trades within a 5 business day period. A trader who executes more than 4 day trades in this time is deemed to be exhibiting a ‘pattern’ of day trading and is thereafter subject to the PDT restrictions. If you do "exhibit" this characteristic IB will lock up your account. If your IRA account has in excess of $25K then the PDT rule does not apply.

Use extreme caution if you are close to $25K in equity because if you dip below the $25K the PDT rule may become effective retroactively - that is the computer will look back at your trading 4 days from the day you go under $25K. At least that is the way I remember it from a sad tale told here on ET.

Jack
 
IB's IRA "margin" account is not a real margin account as there is no real margin borrowing takes place. What IB has is the "same day substitution" IRA. The trades still take 3 business days to settle. You do not have to wait 3 days to place another trade specially if your account balance is $25k or more.
 
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