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View Full Version : How long does it take a trade to settle?



kingplaya4
04-16-2011, 09:21 AM
Pretty basic question I know, but even with a google search I'm unclear on it. The search result said three business days. So if I sell a stock and buy another stock, can I sell that stock on Wednesday or Thursday? (I have a cash account.)

Second question if someone doesn't mind answering... how foolish do you think it would be liquidating an XOM (Exxon) position and buying APPLE at its current price (around 328)? I suspect they will go up after earnings but with Japan, commodity prices and the economy who knows...

theplantguy
04-16-2011, 09:31 AM
It depends on your broker and the kind of account you have. I have instant access to my cash after I sell.
I wouldn't invest in any stocks at this time. But it's a good market for trading.

kingplaya4
04-16-2011, 09:39 AM
Thanks for the quick response. It's a cash (non-margin) account with Firstrade. Yeah, if I do buy APPLE I may not hold it by the end of next week, but I'm expecting a bounce after earnings- do you have an educated guess or would you stick with Exxon?

theplantguy
04-16-2011, 09:46 AM
Not being an investor, I can't comment with any intelligence about either Apple or Exxon.

kingplaya4
04-16-2011, 09:52 AM
Ok, thanks.

Can anyone help me on the trade settling date?

bandicou2010
04-17-2011, 05:47 AM
Ok, thanks.

Can anyone help me on the trade settling date?

PG just did???

bandicou2010
04-17-2011, 05:51 AM
Ok, thanks.

Can anyone help me on the trade settling date?

Sorry I click "post" to quick... If you're talking about US securities, 3 days... But speak to your broker you probably can buy another stock as soon as you sell... It all depends on your broker.

zoezoe
04-17-2011, 06:06 AM
Three days,if your day trading it can be hard to do with a cash account.You could end up short in your account and have to square up or be considered free boarding,they could suspend your trading account for 90 days.I think you need 25,000 min balance to day trade in the States by law.Its always best to call your broker and ask them what you have available if your not sure.If you can get a margin account just to help clear your trades.

Silvercoin
04-17-2011, 12:36 PM
i day trade and i don't need 25K.

i have enough in cash at all times.

i buy and if it goes up i sell and my principle investment is credited immediately and the profits are credited by the end of the day.

i don't invest on margin of course.

zoezoe
04-17-2011, 02:47 PM
i day trade and i don't need 25K.

i have enough in cash at all times.

i buy and if it goes up i sell and my principle investment is credited immediately and the profits are credited by the end of the day.

i don't invest on margin of course.
A pattern day trader is defined in Exchange Rule 431 (Margin (https://www.kitcomm.com/wiki/Margin_(finance)) Requirement) as any customer who executes 4 or more round-trip day trades (https://www.kitcomm.com/wiki/Daytrading) within any 5 successive business days.[4] (https://www.kitcomm.com/#cite_note-3) If, however, the number of day-trades (https://www.kitcomm.com/wiki/Daytrading) is less than or equal to 6% of the total number of trades that trader has made for that five business day period, the trader will not be considered a pattern day trader and they will not be required to meet the criteria for a pattern day trader.[5] (https://www.kitcomm.com/#cite_note-4)
A non-pattern day trader (i.e. someone with only occasional day trading (https://www.kitcomm.com/wiki/Day_trading)), can become designated a pattern day trader anytime if they meet the above criteria.
If the brokerage (https://www.kitcomm.com/wiki/Stock_broker) knows, or reasonably believes a client who seeks to open or resume an account will engage in pattern day trading, then the customer must immediately be considered a pattern day trader without waiting 5 business days.

kingplaya4
04-18-2011, 01:28 AM
Thanks guys yeah I'm trying to avoid being labeled a pattern day trader so that's my main concern. Maybe I'm an idiot, yes I read the three business days, but does that include the day you sold? So I sold a stock and bought another one on Monday, does Monday count as one business day?

SilverNitrate
04-18-2011, 12:37 PM
A pattern day trader is defined in Exchange Rule 431 (Margin (https://www.kitcomm.com/wiki/Margin_(finance)) Requirement) as any customer who executes 4 or more round-trip day trades (https://www.kitcomm.com/wiki/Daytrading) within any 5 successive business days.[4] (https://www.kitcomm.com/#cite_note-3) If, however, the number of day-trades (https://www.kitcomm.com/wiki/Daytrading) is less than or equal to 6% of the total number of trades that trader has made for that five business day period, the trader will not be considered a pattern day trader and they will not be required to meet the criteria for a pattern day trader.[5] (https://www.kitcomm.com/#cite_note-4)
A non-pattern day trader (i.e. someone with only occasional day trading (https://www.kitcomm.com/wiki/Day_trading)), can become designated a pattern day trader anytime if they meet the above criteria.
If the brokerage (https://www.kitcomm.com/wiki/Stock_broker) knows, or reasonably believes a client who seeks to open or resume an account will engage in pattern day trading, then the customer must immediately be considered a pattern day trader without waiting 5 business days.

Some years back when I had only a few Ks in account, I would trigger margin call and then would be bared from further day trades for the period of a quarter which would amount to a 100 days! Thus if I bought XXX today I wouldn't be able to sell it until tomorrow this time. and vice versa, if I sold XXX today, I would,'t be able to buy it again until tomorrow unless I raised that account balance to 25K.
I does take 3 or atleast it used to for the trade to settle. Therefore you have a margin stake equal to about 4x the minimum of 25k. or $100,000. Other non invested-at-the-time cash in the account sits in a sweep. So essentially you would be borrowing the funds of the broker to do trades, and that broker will charge interest on the amount over the cash amount in your account. The broker has it best because he'll asways get the transaction commission.

SilverNitrate
04-18-2011, 12:40 PM
AAPL usually do some crazy stuffs, and generally its better to either short Apple on earnings or buy after the halt (at which it usually does) and ride it back to flatline. Can't say anything for XOM

Melvin
09-08-2011, 03:40 AM
It all depends as to how much time it takes for you to learn the secrets of trade and the faster you learn the faster you can settle down in trade. Even foreign investment is gaining a lot of hype and so people are making huge investments overseas to get better returns in the future.

litemine
09-08-2011, 09:30 AM
Pretty basic question I know, but even with a google search I'm unclear on it. The search result said three business days. So if I sell a stock and buy another stock, can I sell that stock on Wednesday or Thursday? (I have a cash account.)

Second question if someone doesn't mind answering... how foolish do you think it would be liquidating an XOM (Exxon) position and buying APPLE at its current price (around 328)? I suspect they will go up after earnings but with Japan, commodity prices and the economy who knows...

If you trade online, days, if by phone, pay full fees , immediately.
TD...anyways...