Still confused...day trading.

[bry31126]

After reading many threads and ameritrades selling policy, I'm still unclear on Ameritrades day trading policy. I'd like to buy and sell a stock in the same day. I'll do this once this week. I won't be what ameritrade and scottrade consider a "pattern day trader" which is buying and selling 4 times in a 5 day period. Under Ameritrades policy, can I do this? Or do I have to wait 3 days for the sale to clear and then be permitted to sell? I'm new at this could use extra clarification. Thanks!

[LongArm]

If you have a margin account, you can generally buy and sell without worrying about 3-day settlement periods.

Even if you have a cash account, you can buy with settled funds and then sell immediately. You can usually even buy AGAIN immediately after that (using your unsettled funds from the previous sell), but you're not permitted to sell this time until your purchase settles (in 3 days). IOW, you're not allowed to sell something you haven't technically paid for yet. If you do, you may receive what's called a freeriding violation.

As far as the daytrading rules, which are another matter altogether, you're right, with just one daytrade per week, you have nothing to worry about there.

[CSSVT]

If you have a margin account, you can generally buy and sell without worrying about 3-day settlement periods.

Even if you have a cash account, you can buy with settled funds and then sell immediately. You can usually even buy AGAIN immediately after that (using your unsettled funds from the previous sell), but you're not permitted to sell this time until your purchase settles (in 3 days). IOW, you're not allowed to sell something you haven't technically paid for yet. If you do, you may receive what's called a freeriding violation.

As far as the daytrading rules, which are another matter altogether, you're right, with just one daytrade per week, you have nothing to worry about there.

Regarding paragraph two, I encountered this today. Sold a position held over night and tried to buy into another one. I was told it was OK for me to buy it however I could not sell until the next day (had to hold over night).

[turboimpala]

Okay let's say I open up a new cash account and deposit $5,000.
2 weeks later, on Monday morning, I buy $4000 worth of a stock.
Monday afternoon I sell all of it for a small profit, say 0.5%.
Tuesday morning I buy $4000 worth of another stock.
Tuesday afternoon I again sell all of it for a small profit.

When exactly does the freeriding / restriction take place?
When I buy on Tuesday morning?
When I sell in Tuesday afternoon?

[LongArm]

Okay let's say I open up a new cash account and deposit $5,000.
2 weeks later, on Monday morning, I buy $4000 worth of a stock.
Monday afternoon I sell all of it for a small profit, say 0.5%.
Tuesday morning I buy $4000 worth of another stock.
Tuesday afternoon I again sell all of it for a small profit.

When exactly does the freeriding / restriction take place?
When I buy on Tuesday morning?
When I sell in Tuesday afternoon?
When you sell on Tuesday afternoon, because you're selling something you haven't technically paid for yet (as your Monday sell won't settle until Thursday).

[Galt]

I never get that far in a cash account. I always have to wait three days from purchase for next purchase using same funds. Buy Mon, sell Tue, cant buy again until Thursday.