Trade Settlement

HeSaidSheSaid

HeSaidSheSaid

I have an account with Ameritrade. I remember I used to be able to trade stocks many times during a day without any restriction (i.e. having to wait for 3 to 4 days for the trade to be settled). Now I can trade only once in 3 to 4 days because I'm told by the broker I have to wait for 3 to 4 days for the trade settled.
I'm wondering if your broker imposes such a rule on your account. I'm thinking about moving my account to IB.

Thanks for your inputs.
 
Quote from HeSaidSheSaid:

I have an account with Ameritrade. I remember I used to be able to trade stocks many times during a day without any restriction (i.e. having to wait for 3 to 4 days for the trade to be settled). Now I can trade only once in 3 to 4 days because I'm told by the broker I have to wait for 3 to 4 days for the trade settled.
I'm wondering if your broker imposes such a rule on your account. I'm thinking about moving my account to IB.

Thanks for your inputs.
More...
This sounds very retrictive and strange...
Maybe something you might see for small cash accounts.

With a margin account at IB...
I cannot think of anything where settlement date has any significant effect.
The only time I even think about it...
Is for dividend plays to get the ex-date correct...
Or maybe buyin notices on short positions...

But then IB does not give you notice...
They just liquidate...
And you call Customer Service...
Who usually tells you that they have no idea what happened.
 
If you have a margin account with no restrictions, money from sales will be available immediately. If you've had a day trading buying power call and didn't meet the call within 5 days, you're restricted to trades "on a cash available basis" for 90 days. In my experience, this means your money doesn't get replenished on the same day but does appear the day after, but it's possible that a broker could interpret this to mean all your trades take 3 days to clear.

You ought to be able to reach someone who can tell you exactly why you are restricted in this way. The front-line people on the help line sometimes don't have enough info on your account in front of them to know what's going on.
 
It's an SEC rule. Brokers get fined for letting you break the rules (if they are audited and caught). SCottrade paid a hefty fine and now they are religious about enforcing it.

Margin account will cure you of this, however; "if" you are borrowing on the unsettled amount, you will pay interest even if you are in and out in one day. Same rule applies to all brokerages, looks like your team just started enforcing it.

Get a margin account if you want to daytrade or swing in a 2-3 day period.
 
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