if you have lots of cash in the account, it doesn't matter. here's the scenario when you get your account frozen.
1) you buy a stock for $1000 and that is all the money in your account.
2) you sell the stock for $1100 and immediately buy stock2 for $1100
3) you sell stock2 in less than 3 days.
this will freeze your account. the reason being that it takes about 3 days for the actual funds from your sale to appear in your account. your online broker will allow you to reinvest the money immediately, but the actual sale receipt from the first sale doesn't show up for three days. so if you buy the second stock and then sell it on the 4th day, you won't be frozen. OR if you sell the stock within 3 days and you have the cash in your account to cover it, you won't be frozen.
if you have lots of cash in the account, it doesn't matter. here's the scenario when you get your account frozen.
1) you buy a stock for $1000 and that is all the money in your account.
2) you sell the stock for $1100 and immediately buy stock2 for $1100
3) you sell stock2 in less than 3 days.
this will freeze your account. the reason being that it takes about 3 days for the actual funds from your sale to appear in your account. your online broker will allow you to reinvest the money immediately, but the actual sale receipt from the first sale doesn't show up for three days. so if you buy the second stock and then sell it on the 4th day, you won't be frozen. OR if you sell the stock within 3 days and you have the cash in your account to cover it, you won't be frozen.
To answer your question..a margin account has nothing to do with the problem you are having..
So you DID have the account frozen right or warned right?
The rules are that you must have 25k in the account, not margin balance but 25k in cash to avoid the rules which you are referring.
If not you can only trade the balance of the account without this being an issue..
So one day you can only buy and sell the value of the account. The only thing margin does is expedite settlement..so instead of a 3 day settlement you have a one day settlement.
25k in value is the key....
To answer your question..a margin account has nothing to do with the problem you are having..
So you DID have the account frozen right or warned right?
The rules are that you must have 25k in the account, not margin balance but 25k in cash to avoid the rules which you are referring.
If not you can only trade the balance of the account without this being an issue..
So one day you can only buy and sell the value of the account. The only thing margin does is expedite settlement..so instead of a 3 day settlement you have a one day settlement.
The account wasn't frozen. It was just something someone was telling me that could happen.
I was buying a stock and selling the stock in a 1 day turn around when I was told this. I had cash in my account to cover if I wanted to buy another stock before the first sale would hit my account.
From what I was doing I believe I should be alright as long as I have enough cash in the account to buy a second stock without the sale money from the first stock needed to purchase the second sock.
The account wasn't frozen. It was just something someone was telling me that could happen.
I was buying a stock and selling the stock in a 1 day turn around when I was told this. I had cash in my account to cover if I wanted to buy another stock before the first sale would hit my account.
From what I was doing I believe I should be alright as long as I have enough cash in the account to buy a second stock without the sale money from the first stock needed to purchase the second sock.
The account wasn't frozen. It was just something someone was telling me that could happen.
I was buying a stock and selling the stock in a 1 day turn around when I was told this. I had cash in my account to cover if I wanted to buy another stock before the first sale would hit my account.
From what I was doing I believe I should be alright as long as I have enough cash in the account to buy a second stock without the sale money from the first stock needed to purchase the second sock.
The account wasn't frozen. It was just something someone was telling me that could happen.
I was buying a stock and selling the stock in a 1 day turn around when I was told this. I had cash in my account to cover if I wanted to buy another stock before the first sale would hit my account.
From what I was doing I believe I should be alright as long as I have enough cash in the account to buy a second stock without the sale money from the first stock needed to purchase the second sock.
If you have 10k to use towards purchases and you buy 6k of a stock one day, same day sell the 6k stock, you can STILL use the 4k to purchase another stock.
You were using terms that made me think you were more than talking to a friend about the issue...
thats correct.
If you have 10k to use towards purchases and you buy 6k of a stock one day, same day sell the 6k stock, you can STILL use the 4k to purchase another stock.
You were using terms that made me think you were more than talking to a friend about the issue...
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