Selling stock and delay for accessing proceeds?

[PCMarine]

Hey all,

So I bought some stock on Tuesday and sold it this morning (Thursday). For short term stock transactions, there is always a delay before I have access to the proceeds from the sale. When I sell stock that I've held for awhile, I have access to the money immediately. What is the protocol for this process? I presume this is a restriction for day trading purposes, but I would like to know for sure. The broker is TD Ameritrade if it matters.

Thanks

 

[Billb2]

You're not actually waiting for the trade to clear, you're waiting for the actual cash involved in the trade to change hands at all the brokerage houses involved in the trade.
The SEC has a rule that you can't trade with money that you don't actually have, so you can't trade with money from a sale unless there is enough money in you account to cover you until the actual, final reconciliation takes place. What the broker is doing is just preventing you from doing that.

I used to get caught is that with eTrade. They would let the trades go through (i was doing 5-25 trades per day) and would get these nasty letters. So when they threatened to close my account, I called them up and and asked what the problem was.

Your broker will be more than happy to explain it for you.

 

[her209]

See Free Riding

 

[JS80]

TREE BIDNESS DEYZ

 

[Billb2]

See. What he said.

 

[PCMarine]

Ah, makes sense. Thanks!

 

[IHateMyJob2004]

That's weird. I have the money available immediately. What broker are you using?