Spotted a bug in TastyTrade/TastyWorks example

[traider]

Likely due to this
Free-Riding Violations: Free-riding violations happen when an investor sells a security that was purchased using unsettled funds and uses the proceeds from that sale to purchase another security before the original purchase has settled. This practice essentially relies on the proceeds from a sale that has not yet settled to make a new purchase. To avoid free-riding violations, investors should wait until the funds from the original sale have settled before using them for a new purchase.

 

[The_Krakenite]

Well, the good news is T-1 settlements are coming soon to Canada as well. Though then we'll be arguing why we can't have T-0 settlements, and then real-time settlements. Though I see a lot of more nasty exploits and big problems with those when/if they do happen.

 

[earth_imperator]

Likely due to this
Free-Riding Violations: Free-riding violations happen when an investor sells a security that was purchased using unsettled funds and uses the proceeds from that sale to purchase another security before the original purchase has settled. This practice essentially relies on the proceeds from a sale that has not yet settled to make a new purchase. To avoid free-riding violations, investors should wait until the funds from the original sale have settled before using them for a new purchase.

Is not this case, and FYI: even with unsettled cash you can open a new trade, but you may not close it on the same day. As said, this all did not occur in my case.

 

[earth_imperator]

Well, the good news is T-1 settlements are coming soon to Canada as well. Though then we'll be arguing why we can't have T-0 settlements, and then real-time settlements. Though I see a lot of more nasty exploits and big problems with those when/if they do happen.

I guess you mean "T+1", not "T-1"

 

[The_Krakenite]

Whoops. Sorry. I was thinking too much on my flux-capacitor and my parked DeLorean outside... I'm just glad I didn't buy STOCK in the company during the early 80s.

 

[zdreg]

And: IMO only sales generate "unsettled cash", not buys.

I think I spotted an error in how TastyTrade interprets the situation in the following reality
https://support.tastyworks.com/support/solutions/articles/43000435231-good-faith-violation-gfv-
View attachment 315352
The error is with the first entry on Tuesday: they say "XYZ Call purchase settles". But this is IMO incorrect, because the purchase was already using settled cash (ie. UnsettledCash=$0 on Monday), so there is nothing further to settle in this case. The rest of the picture is correct.

And: IMO only sales generate "unsettled cash", not buys.

See also https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations

There is no error. You are selling abc puts with unsettled funds from the sales of xyz puts

 

[earth_imperator]

There is no error. You are selling with unsettled funds.

Did you also read the fidelity example?
It reads: "[...] she had sufficient settled funds to pay for the purchase of XYZ stock at the time of the purchase."

As said, only sales generate unsettled cash.
And the initial 500 is normal settled cash, b/c otherwise one would mention that it's unsettled cash.

 

[zdreg]

There is no error. You are selling abc puts with unsettled funds from the sales of xyz calls.

 

[earth_imperator]

There is no error. You are selling abc puts with unsettled funds from the sales of xyz puts

Sorry, but you are lost in this case. Please study it a little bit closer.

 

[zdreg]

Sorry, but you are lost in this case. Please study it a little bit closer.

You may be right. I need to remove cobwebs currently in my mind.