My employer set up a 401K account for me with Schwab. I found out today that Schwab could not change this account to Margin account for daytrading. I asked if rolling over to IRA account will help and they said no. No margin account for 401K or IRA. Is this the same for all brokerage firms?
NO broker allows trading on margin in IRA/401K accounts. How would you replenish the funds on a margin call higher than the maximum allowed IRA annual contribution? Multiple daily buying/selling in a CASH account would be free riding!
In order to daytrade, you need a margin account. I daytraded once and they restricted my account for 90 days with "trading only settled fund". That means after I sell, I have to wait 3 days to have the fund available to buy something again.
You may day trade in an IRA account. I know IB offers this capability and believe TOS does as well. From IB's Web Site: US resident customers may open cash or margin Individual Retirement Accounts (IRA). IRA margin accounts may never borrow, but are afforded all the other benefits of a margin account such as the ability to day trade, and the ability to trade multiple currencies and multiple currency products.... Emphasis added. Jack
daytrading stocks in 401k is a waste of time and commissions. 401k should be for investing long term daytrade futures instead.
FUTURES may be daytraded in your IRA (not 401K) account. You contact a broker, and they will have you go through a trust company - only way to do it un USA. (mtrustcompany.com is the biggest and in my opinion, the best. They only hold back $500, instead of a large % of your money like several other trust companies do).