I have two margin accounts with Fidelity. 1) Account A fell bellow the 25,000 minimum equity trading required and was restricted. 2) Start trading in account B and an overnight holding caused an $7,000 day trade call and the account was restricted until May 15. 3) Transferred funds from accounts B to account A and the balance on A is now over $50,000. According to Fidelity because I transferred money from a restricted account, Account B, now account A is also restricted until May 15 and I am not able to execute even cash trades. Is this action correct or should I try to get the restriction lifted from account A? Thanks for your help.
English is not my primary language and maybe the first message is not clear. I will try to rephrase the message in hopes of an answer. ================================================= I have two margin accounts with Fidelity. Account (a) is restricted until May 15 because an unmet day trade call and I transferred funds from this account to the other account (b). According to Fidelity account (b) is also restricted until may 15 because I transferred money to it from a restricted account. Is this action correct or I should try to get the restriction lifted from account. Thanks for your help.
Madera, your restriction was due to a PDT violation, I presume. Brokers handle it differently - it's actually ambiguous. They usually will give you a warning the first time and tell you not to let it happen again (day trading with equity below 25K). If you violate the PDT rule again, they may take away your margin privileges. I've never heard of a b/d maintaining a restriction after the account was brought above the 25k threshold - so that is strange. If I were you, I would trade with a b/d that caters to active traders - such as RML Trading. Cheap commissions and they have a lot of active trader accounts (including mine).
You broker has the privilege to take that action. It is not strange. However, you are allowed to withdraw or transfer your own money. You can and probably should open up a new account another brokerage firm.
madera01, just for the clarification: your account A now has "day trade call" but not other PDT limitations since it is now $25k+. Is that correct?
I decided to close the Fidelity accounts and open an account with Interactive Brokers. Thank you very much the4xczar and GTC for your advice.