Cash Accounts

Good Faith Violation Example - GFV Call

Good Faith Violation in Cash Accounts A Good Faith Violation (GFV) occurs when an account has liquidated securities that were bought on unsettled proceeds in Type 1. Or, in other words, selling a position that was purchased with unsettled funds before the sale that originally generated the proceeds (used to make the purchase) settles, will result in a GFV. Example: An account sold 100 shares of Apple then bought 200 shares of Westar on 5/26. Before the Sell of 100 shares of Apple settled, the...

Cash Account Trading Rules

Rules for Trading in Cash Accounts Trades placed in a cash account require 2 business days for the funds to fully settle before they can be used to buy and sell again. Trade date + 2 business days. Accounts with less than $25,000 dollars, are limited to 2 rounds trip "day trades" a week (buying and selling on the same day). After 2 round trip trades, a cash account holder is considered a day trader. A day trader must maintain a minimum balance of $25,000 dollars and is still subject to 2 day s...

SEC Cash Account Publication

Cash Account Trade Settlement (Cash Trades Settlement Dates are Trade Date + 2 business days) SEC Publication Please click here to read the SEC Publication for T+2 Trading Settlements regarding Cash Accounts (https://www.sec.gov/news/press-release/2017-68-0) About Settling Trades in Three Days: T+2 Investors must settle their security transactions in three business days. This settlement cycle is known as "T+2" — shorthand for "trade date plus two days." This rule means that when you...

FINRA DayTrading Rules

Day-Trading Margin Requirements: Know the Rules FINRA DayTrading Rules Please click here to read the FINRA Published article (http://www.finra.org/investors/day-trading-margin-requirements-know-rules). You may also read the information below. Summary of the Day-Trading Margin Requirements The rules adopt the term "pattern day trader," which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times ...

Accounts Trading with Balances Below $25000

Accounts Trading with Balances Below $25000 Dollars Any account with less than $25,000 dollars trading that executes more than 2 "Day Trades" within any running five-day period will be flagged as a Day Trading account. *Day Trade: “The purchasing and selling or the selling and purchasing of the same security on the same day.” EXAMPLE: June 6 -11 (5 running days) Trade 6/6/16 MSFT Buy 100 Trade 6/6/16 MSFT Sell 100 (DAY TRADE 1) Trade 6/6/16 UVXY Sell 100 Trade 6/6/16 UVXY Buy 100 (DAY...