Stock Trading and Other Things

Is there a T+3 day rule is we trade with 50 percent Margin and 50 percent Cash?

Since there is the T+3 day rule. Lets say I have 5000 cash account. With Margin I can use up to 50 percent on Margin and 50 percent On cash account is that correct?

So every stock I buy I must cover at least 50 percent? Which means i can only trade 4 days outta 5 in a week

I can trade Monday 2500cash/2500 Margin ( 5k total), I can trade Tuesday (2500cash/2500 Margin). With the T+3 day rule, I usually get my money back by Thursday and Friday.

Which means I can't trade on wednesday? Should I use a different approach? I want to invest the most capital on the following week.

Public Comments

1. u dont have to wait for settlement to trade again.. once you sell the stock you freee up cash immediately

2. Buying a stock on margin means you only have to put up 50% of the cash required. You are borrowing the rest at the prevailing interest rate of the account. Buying with cash means you put up 100% of the cash required. Buying on the margin is usually done only with stocks that you do not intend to hold for a long time. the +3 means that it will take three days for the trade to be finalized. Once you make a trade make sure that it has been executed before buying anything else. Trades are usually executed fairly quickly.

3. You can sell immediately after you buy and buy immediately after you sell.
The 3 day rule requires you wait 3 days between each sell and between each buy.
That means you can buy something on Monday and sell immediately after you buy.
But then you have to wait until Thursday before you can use the proceeds from the sale.

The 3 day rule does not apply if you have the 25000 dollars of equity required for day trading.
For day trading in equity securities, the day trading margin requirement shall be 25% of either:
the cost of all day trades made during the day; or
the highest open position during the day.
http://en.wikipedia.org/wiki/Pattern_day_trader#Requirements_and_Restrictions

4. 50% cash is the limit on what you have to put up. When you sell, you get the cash back to use again. If you sell, then you buy right away, this is OK because your buy will not settle before your sell. You only have to worry about your net position. I don't worry about it at all because my trading software keeps track of what I'm allowed and adds everything back for me when I get out of a position.