I have been trading equities in a cash account. I have some questions about a margin account. I am educated on the differences between standard and pattern day-trading accounts. With a margin account, do you avoid the T+3 stock clearing time period after selling? Always waiting for the cash to clear I really miss some opportunities and wish to find a way to avoid the wait. If this T+3 cannot be avoided, how do people day-trade everyday? That would take a large amount of cash in a margin account. Thank you for educating me. I search for this answer on the internet and did not find a clear statement.
In a regular margin account, you have immediate access to your funds for trading as soon as you liquidate something. You still have T+3 for withdrawals. The PDT rule has nothing to do with margin/cash. You also need a margin account for selling short. Some brokers (e.g. IBKR) offer a restricted margin account for tax-advantaged customers (i.e. IRA's). It gets around the T+3 rules but does not allow the use of leverage. All customers are subject to PDT rules. The only way around that is to become a proprietary trader.
Just for your info as well, options are T+1, and futures have nothing at all and no day trading rules!
All good replies. Therefore, no T+3 waiting for margin accounts while trading, excluding a withdraw. That explains how to day-trade each and every day without the cash account problem of free-riding. I understand the margin account is needed for shorting. And I like the Futures way of doing things, no PDT to worry about, muc simpler! Thank you for your time.