Help with Settlement Dates

[moemaynard]

I thought I would ask about this here since it seems a good as place as any;

Today I bought and sold VLGC in my Etrade IRA and then tried to buy another stock but I am told by their customer service that I will have to wait until the settlement date until I can buy another stock. I can't believe this shit! It seems that if I am using all my funds in my IRA to buy one stock, I can't buy another and sell it until 1-3 days after....what a load of shit!

Does anybody know of a way around this? I called Scottrade and they have similar rules supposedley imposed by SEC. What a crock...

[billyjoe]

help with settlement dates

Moemaynard, I trade with Muriel Siebert online and have no such problems. In fact I called and asked about that very subject a few days ago. Even though the $ isn't shown in the "positions" for a few days after the trade they assured me I could trade with that amount almost immediately and I did two days ago. It costs 14.95 per trade which is more than some others, but the customer service is excellent. Billy Joe

P.S. Moemaynard, I was referring to using all available funds, selling, and then using them immediately to buy another stock. I didn't buy and sell the same stock on the same day, however.

[IIC]

Settlement Dates

Here's how it works at Scottrade...I have 5 accounts there...you could get margin but not on tax-free (Roth) or tax-deferred (IRA) accounts...so in my tax accounts it works like this:

Sell a stock...you can immediately use all those funds to purchase another stock(s). However, you cannot sell the second stock until the sales settlement of the first stock which is 3 business days. It is kinda dangerous doing this though...For example, I BOT CKCM this morning with unsettled funds...then it tanks and I can't get out. I knew this and went in light.

Actually, you can sell the 2nd stock...but then your account gets restricted because you took what they call a FREE RIDE...hasn't happened to me so I'm not sure what restricted means...But a buddy of mine did it at another brokerage and they restricted him to no internet trades for 90 days...had to make his trades by phone. Hope this helps...Best, IIC

[moemaynard]

Thanks fellas....

Good info to have. I hear Etrade is clamping down after numerous warnings from the SEC. This shit is silly. Just seems like another way to screw small investers by not giving them the freedom they need. In this day of electronic everything, I find it hard to believe that it should/could take 3 days to settle a stock trade....bullshit.

what's everybody buying today? I'm going to free ride etrade today as a going away present..they owe me at least 5k in trading fees for the last 4 years.

[mimo_100]

Re: Help with Settlement Dates

I thought I would ask about this here since it seems a good as place as any;

Today I bought and sold VLGC in my Etrade IRA and then tried to buy another stock but I am told by their customer service that I will have to wait until the settlement date until I can buy another stock. I can't believe this shit! It seems that if I am using all my funds in my IRA to buy one stock, I can't buy another and sell it until 1-3 days after....what a load of shit!

Does anybody know of a way around this? I called Scottrade and they have similar rules supposedley imposed by SEC. What a crock...

Years ago, there was a 5 day settlement, mostly to allow the physical stock certificates to be delivered via snail mail from the seller to the sellers broker. I assume the certificates you sold were in street name, i.e., Etrade is holding them for you. The 3 day settlement still exists because there still are people who hold certificates, especially corporate and muni bonds.

If the certificates were in street name, Etrade will have no trouble delivering them to the buying broker. You should be able to use the funds to buy another stock. As a matter of fact there is a "when done" order that a broker can execute. That is, "sell 1000 XYZ at market, when done, buy 2000 ABC at market" which is a same day order.

Tim

[talkingrobe]

Why get so upset. They are just rules we all have to live by. Kind of like looking both ways before you cross the street. Now you don't have to look if you don't want to... your choice...how lucky do you feel today?

It would be best to look both ways at the rules you need to trade before you cross that street.
Just continue to learn the work arounds you need to trade. If you fight the system it will fight back. Play the game and you win.

Good luck!