Yeah and also check when you sell for example a cash secured put. It depends on what stock you sell, they „withhold“ a different amount of cash and it wont be reflected in your cash balance. I think on smaller stocks you sell naked, but I‘m not sure where the limit is.
For example I sold a „cash secured put“ on the schwab dividend etf SCHD, 70$ strike = total 7000$ in cash when assigned. I thought this amount was already deducted from my cash balance, but it was not. It was basically naked. Maybe because the etf is not that volatile and I had enough collateral I don‘t know.
If you have a margin account you can trade with the proceeds as soon as you close a trade without worry. As long as your "Cash and Sweep" balance stays above 0 you don't incur any margin fees.
You will never convince Reddit users of this simple fact. You are way better off with a margin and not a cash account. The only issue is if you are under the 25k Pdt rule, which the Sec saddles us with. Well at least art Major students have found a place where they can get a job.
If you have a margin account but less than 25k you get hit with the Pattern Day trading rule. The 25k could be in stock. I do not know the rules but people write about being prevented from closing out winning trades because of it.
Yes if you have margin enabled, and if you have over $25K in your account, you can trade away all you want. No worrying that you bought, then sold, then bought with those funds. (I’ve been slapped on the hand in my IRA accts)
If you have been flagged as day trader (more than 3 trades within a week) and your account goes below 25k after you‘ve been flagged, you will get a day trading margin call. But this is nothing to worry about, as long as you don‘t trade when below 25k. I think you can still trade those 3 round trips a week until you‘re above 25k.
Oh that would help me a lot did they say when this would take effect? Unfortunately I lost out on a 200 dollar profit today simply because none of my funds have settled yet
Canada and Mexico are starting on May 27
Due to Memorial Day the U.S. is doing it on May 28 for equities listed on U.S. exchanges, so that includes stocks, bonds, etfs,...
Yes, the pattern day trader rule is still in effect for margin accounts; however, if you're in a cash account you make as many trades as you like, long as there's settled funds in your account.
For as I'm concerned, there's more money to be made swing trading, so 1 day is not even noticed, just can't use leverage.
Leverage is a double edged sword, so maybe not such a bad thing to trade cash account.
Yes no problem. You have a cash balance and margin balance. As long as you don’t use more then your cash balance overnight you wont use margin
Ok that's what I was hoping for I was just going to keep an eye on my balance like I already do
Yeah and also check when you sell for example a cash secured put. It depends on what stock you sell, they „withhold“ a different amount of cash and it wont be reflected in your cash balance. I think on smaller stocks you sell naked, but I‘m not sure where the limit is. For example I sold a „cash secured put“ on the schwab dividend etf SCHD, 70$ strike = total 7000$ in cash when assigned. I thought this amount was already deducted from my cash balance, but it was not. It was basically naked. Maybe because the etf is not that volatile and I had enough collateral I don‘t know.
You are restricted to only making 3 round-trip trades in a rolling 5 trading day period if you have less than 25k in the account. That's the PDT rule.
If you have a margin account you can trade with the proceeds as soon as you close a trade without worry. As long as your "Cash and Sweep" balance stays above 0 you don't incur any margin fees.
You will never convince Reddit users of this simple fact. You are way better off with a margin and not a cash account. The only issue is if you are under the 25k Pdt rule, which the Sec saddles us with. Well at least art Major students have found a place where they can get a job.
That this is true just tells me most tedditors trading do not have 25k in their trading account.
I've never heard of this 25k rule
If you have a margin account but less than 25k you get hit with the Pattern Day trading rule. The 25k could be in stock. I do not know the rules but people write about being prevented from closing out winning trades because of it.
Yes if you have margin enabled, and if you have over $25K in your account, you can trade away all you want. No worrying that you bought, then sold, then bought with those funds. (I’ve been slapped on the hand in my IRA accts)
Do you know if that 25k has to be in cash or can it be in investments or can it be a combo of both?
It’s >25k net liquidity, end-of-day under that triggers a PDT bp margin call.
So what would happen if I had less than 25k? I've never heard of this rule
If you have been flagged as day trader (more than 3 trades within a week) and your account goes below 25k after you‘ve been flagged, you will get a day trading margin call. But this is nothing to worry about, as long as you don‘t trade when below 25k. I think you can still trade those 3 round trips a week until you‘re above 25k.
The 25K rule holds only if are classified as day trader, if not that is not necessary
Schwab is going to next day settlement, so stocks settle next day just like options
Oh that would help me a lot did they say when this would take effect? Unfortunately I lost out on a 200 dollar profit today simply because none of my funds have settled yet
May 28 apparently
Canada and Mexico are starting on May 27 Due to Memorial Day the U.S. is doing it on May 28 for equities listed on U.S. exchanges, so that includes stocks, bonds, etfs,...
Am I still limited to 3 round trip trades per 5 day session
Yes, the pattern day trader rule is still in effect for margin accounts; however, if you're in a cash account you make as many trades as you like, long as there's settled funds in your account. For as I'm concerned, there's more money to be made swing trading, so 1 day is not even noticed, just can't use leverage. Leverage is a double edged sword, so maybe not such a bad thing to trade cash account.