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Question of clarification:
Is "restriction" of an account purely a function of whether it is cash or
margin account or does the minimum account balance of $25,000 required for
day trading also come into play?
Thanks,
Dan (aka "small fry")
>From: "Jacobson, Alex" <AJacobson@xxxxxxxxxxxxxx>
>Reply-To: realtraders@xxxxxxxxxxxxxxx
>To: <realtraders@xxxxxxxxxxxxxxx>
>Subject: RE: [RT] Ameritrade "T+3"
>Date: Fri, 21 Nov 2003 19:47:07 -0500
>
>This is restricted cash accounts. This rule for "restricted" accounts will
>apply at ALL brokers. Don't allow your account to become restricted.
>
>-----Original Message-----
>From: uenal.mutlu@xxxxxxxxxxx [mailto:uenal.mutlu@xxxxxxxxxxx]
>Sent: Friday, November 21, 2003 7:12 AM
>To: realtraders@xxxxxxxxxxxxxxx
>Subject: Re: [RT] Ameritrade "T+3"
>
>
>It is indeed true! I found this info at their site:
>
>"RESTRICTED TRADING IN CASH ACCOUNTS
>
>On May 29, 2003, Ameritrade implemented changes to its systems relating to
>the
>calculation of funds available for trading in cash accounts. If you have
>any
>questions concerning the current balance shown on the Web site, please
>contact a
>Client Services representative at 800-823-2835.
>
>Under applicable interpretations issued by the staff of the Federal Reserve
>Board
>System, cash account clients are prohibited from making a practice of
>selling
>securities without having paid for their purchase with "Available Cash" in
>their
>account. "Available Cash" includes existing cash in the account, the
>proceeds of
>settled sales of fully-paid for securities, and additional cash deposits.
>Proceeds of a sale of a security where the prior purchase had not yet
>settled may
>not be included as "Available Cash" before the settlement date of that
>prior
>purchase - which is generally three business days.
>
>The following example illustrates activity that will result in a 90-day
>restriction:
>
>A client is holding $10,000 cash in a cash account. The client then makes
>the
>following transactions:
>
>The client buys a position in Company A for $10,000, applying the $10,000
>in cash
>to pay for the purchase.
>
>The client then sells that position in Company A and nets at least $10,000
>in
>sale proceeds.
>
>Next, the client buys a position in Company B for $10,000, relying on the
>proceeds of the sale of Company A shares that have not settled to pay for
>the
>purchase.
>
>Before the sale of Company A has settled, the client sells the position in
>Company B and nets $10,000.
>
>In the above example, the client sold Company B shares before paying for
>them.
>Trading in this manner in a cash account may result in a 90-day
>restriction,
>limiting purchases to the "cash" available in your account on trade date. "
>
>
>----- Original Message -----
>From: <uenal.mutlu@xxxxxxxxxxx>
>To: <realtraders@xxxxxxxxxxxxxxx>
>Sent: Friday, November 21, 2003 6:03 AM
>Subject: [RT] Ameritrade "T+3"
>
>
> > Is it true that Ameritrade does not let you reuse
> > the money of a closed position for 3 days???
>
>
>
>
>
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