Quote from WALLACE29: I was hoping to buy and sell thru the course of the day and not have to rely on dealing with margins. I do not quite know why, but I have a fear of dealing with margins. As an Example: I have a $35,000. cash account and thought I could buy $35,000. of stock in the morning then sell it. Take the proceeds of the prior transaction and buy another stock the same day Last I heard, you can't do this in a cash account at some brokerages, including IB. It's considered free-riding. Just open a margin account. You don't actually have to ever use margin - it just enables you to re-use the proceeds of a sale on the same day, without waiting for it to settle. Also that the value of the ccount does not fall below $25,000. Right - you need to keep your account equity at least $25K or you'll be restricted to the 3/5 rule again. Am I interpreting the rules correctly or will this trading style result in a margin call. Someone didn't read their account material carefully IB does not issue margin calls. They liquidate positions to bring you in line, and/or prevent you from doing things that could result in a margin violation (like exceeding initial margin requirements, opening a 4th trade after 3 day trades in the last 5 days in a margin account with <$25K, or re-using proceeds of a sale in a cash account).
Thankyou Danr. Bundlemaker, Mettoox and Alanm. I am still a little confused, but less so with your advice. Ultimately, the solution to this is to start trading with IB and see how my trading style works within the system. I am still in the stage of my trading career where the whys and whens of a trade seems to take 100% of my time. I was hoping that the mechanisims behind my trades would be transparent. But like every other part of life, there is always something to be learned. I will keep every one abreast of my expieriences.