How do you guys beat the settlement periods? (Scottrade, brokers, fund) - Investing -stocks, bonds, mutual funds, trading, market, brokers - City-Data Forum

There are two likely reasons why a customer would be unable to buy and sell a stock in the same trading day. The most likely explanation for your situation is that your online brokerage will not let you day trade in your account due to your level of experience as a trader. Here is how the NASD defines day trading:.

Why won't my broker allow me to sell one stock and buy another on the same day? | Investopedia

The other possibility is that the account does allow day trading, but it has a number of restrictions set up to prevent you from doing serious damage to your financial situation by over trading without understanding the risks involved. If you are a first-time investor, we can assume that your account has a number of restrictions on it that prevent you from investing in illiquid securities, extremely volatile securities, and so on.

Because of the fee structures and complex regulations involved, brokerage accounts are usually set up with restrictions for beginner investors. Customers can ask to have these restrictions removed from their accounts.

Depending on the brokerage firm and the customer's financial situation, the restrictions may be removed or loosened at the customer's request or after a given number of trades have been made. If you continue to find your brokerage account too restrictive, you may want to shop around.

Some online brokers are less restrictive on account activities than others. Depending on the brokerage, day trading can be defined as anything from making more than one trade in do stocks trade premarket day, to buying and selling the same stock in can i buy and sell a stock on the same day scottrade day.

Investigating your brokerage's policy on this matter may lead you to seek another online broker with less trading restrictions. For further reading, see 10 Things To Consider Before Selecting An Online BrokerChoosing A Compatible Broker and Day Trading: When a stock is sold in an account, the cash does not settle for 3 business days. If there is no settled cash in the account and it is NOT a margin united states patent and trademark office trademark electronic search system, then the broker will not allow the same day purchase of another stock because there is no cash in the account and no provision to loan the cash for the 3 day settlement period.

To do otherwise is referred to as "free riding" which is not allowed.

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Here is how the NASD defines day trading: Free Consultation Was this answer helpful? Kluskowski, Paul Farmington, MN. Investopedia does not provide tax, investment, or financial services.

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