Today I noticed in my cash account at Interactive Brokers that Buying Power reflects all cash, including unsettled trades. I'm pretty sure it wasn't doing this last week and positive it hasn't been doing it all along. I placed a test limit order that definitely would use unsettled funds, and there was no indication of it. Any ideas? Is this an intentional change? I guess if I don't want to buy with unsettled funds and take a chance on violating the freeriding rule, it may not really matter. The worst that could happen is that I'd be locked out of buying with unsettled funds for 90 days, but since I don't want to use them anyway, so what? Is this correct? In particular, there's never any hindrance to selling, right?
It should be this way. There is no violation. You can use a your entire account funding to buy a stock , sell it a minute later, and again load up on a stock or future the moment after and max out on your account balance to satisfy margin requirements. The devil is in the details but that is only what the broker concerns itself with , not you ad client. It is true that each of those trades must be settled and that takes 1-3 days generally, depending on asset class and geographic clearing and settlement agreements.
You have a non margin account? Then usually you would have to wait till funds settle. Are you sure you have a non margin account? You cannot trade based on margin? If that's the case then your question makes sense.
Yes, I have a cash account. It is allowed under Reg T to purchase with unsettled funds in a cash account. The problem occurs when you buy with unsettled funds and then sell before the funds have settled. This is called "freeriding," and it invokes a 90 day freeze on the ability to purchase with unsettled funds. To help with this, Scottrade reports the "Settled Funds Available for Trading" amount, and IB's "Buying Power" used to reflect this amount; that is, it would be less than the cash held in the account if unsettled funds were present. Here's a link to the SEC's FAQ on freeriding, and it has links to related topics. https://www.sec.gov/answers/freeride.htm
Ah. To quote from that IB article: I'm going to assume "access" means all types of access, trading or withdrawal. That's different from Scottrade, which does allow trading. If accurate, it means as of today at least, IB has totally screwed up "Buying Power" for cash accounts, because it's reporting my entire cash balance as settled, even though it isn't. Guess I need to bring this to their attention.