I have 10,000 dollars in my brokerage account.
If I buy stocks worth of 10K today and sell them off later in the day, making a profit just say of $10,500 and I want to trade the next day using those funds...will I be able to use tht money? or do I have to wait like 3 business days?-I am not on margin or options.
Thanks.
2007-12-18 13:46:58 · 4 answers · asked by abc123 3 in Business & Finance ➔ Investing
even if i buy the same stock?
like if i buy and sell apple today..can i buy apple tomorrow using those funds?
2007-12-18 14:58:15 · update #1
As long as the money stays in the account you can use it.
2007-12-18 14:07:05 · answer #1 · answered by louiethebruinfan 2 · 0⤊ 0⤋
It depends on whether your account is a 'cash' trading or 'margin' trading account.
The gains you described above are considered 'unsettled' funds.
With a cash account, you have to wait until the sale 'clears' before using the gains from the sale to make a new trade - usually three business days from the close of the sale. A cash account forces you to only make trades using 'settled' funds.
However, most brokerages will allow you to trade on margin with as little as $1000 in your trading account, so that as soon as your sell order is filled, you can execute another order immediately because your account will show funds as being available. A margin account will allow you to use 'unsettled' funds.
It doesn't matter what stock you buy. However, if you purchase the same stock for a loss, you run into the 'wash sale rule' if it's within 30 days of the original sale. You can't write off the loss on your taxes at the end of the year. But check with a CPA on that one.
Having a margin account will allow you much more flexibility in what you can do in your trading activity, but you have to be much more careful in your money management, as well. If you incur a loss in excess of your margin amount, your brokerage may institute a margin call an either liquidate some of your holdings to meet the call or require you to deposit additional funds to meet your minimum margin requirement.
2007-12-18 15:05:43 · answer #2 · answered by Aaron 2 · 0⤊ 0⤋
You need a margin account. If you buy and sell in the same day.... there won't be any interest charge.
2007-12-18 14:08:21 · answer #3 · answered by Common Sense 7 · 0⤊ 0⤋
You will have to wait 3 days for sure. The $10.5k is "unsettled funds".
2007-12-18 14:51:12 · answer #4 · answered by arizona wolfman 5 · 1⤊ 0⤋