Question about 3 day settlement rule

I'm a little unclear about the 3 day settlement rule with short term trades.

Normally when I buy a stock and hold it 3 days and sell, the funds are available immediately. So wouldn't a stock I bought yesterday and sold today have the funds available Thursday (3 days after buying)?

(I don't have daytrading status and have less than $20k in my account.)

 

As long as you have a margin account you have the funds available right away.

 

I don't have a margin account.

 

You should get one, even if you don't use margin.

 

I've looked into it, but my brokerage doesn't allow margin accounts with a Roth IRA, which is what I have.

 

It takes 3 days to settle the trade (buy or sell) so in a cash account the funds are available 3 days after the sale not 3 days after the purchase.

 

Bingo. 3 days after a trade. I've seen some go quicker but I plan 3 days with one of my accounts.

It makes you relook at how quick you get out if you know that cash will be tied up for 3 days.

 

IB has a "limited margin" account type for IRAs.

 

So if you have margin, does it mean that you don't need to follow the T+3 rule? Ex. Let's say you have $1000 in equities in your account. If you close out your position by market close, then can you theoretically buy the next day again and repeat each day?

 

Margin account means you don't have to wait 3 days for the funds to become available. It still takes 3 days to settle the trade though.