Why not trade in your IRA? Is buying and holding mutual funds in your IRA "safer" than trading? I assume by trading you mean not buying and holding - investing. I have a couple of defined risk options strategies I trade in both my margin account and IRA at IB. I'm very happy with this arrangement.
Even Scottrade has limitations on what you can trade before the actual settlement date (though why in today's real time environment, I can't fathom). I'm still working a a regular job, but when I was with another broker, they wouldn't let me buy anytying until the settlment date of my sale. Scottrade lets you buy immediately, but you are subject to the Fed rules if you sell again before settlement. Bunch of BS as far as I'm concerned.
Cons: Trading stocks in an IRA account: - Can't "day trade". Need to wait until trade is settled before buying. - No margin leverage. No 2:1, no 4:1. - Can't short. You can work-around it by buying Ultra Short ETFs, like SKF, SDS, FAZ, etc.. But... you can open an IRA futures account to trade index futures (e.g. e-mini S&P, e-mini Dow, Russell, etc.). Advantages: - Leverage - Can short or long as you please - Can day trade
Big plus: no tax accounting every year and no tax until w/d, so turning over a $1 million account every day or two would skip reams of Schedule D filings for stock trading. Margin account IRAs allow much more frequent trading, ca once a day, than cash account IRAs. The implementation or explanation of the margin IRA trading limits varies with who you ask. Personally I think cash account IRAs are dangerous - not being able to sell for 2-3 days in a market like this seems likely to lock one into an underwater investment - buy, hold and mold.
I had no idea you could even have an IRA Margin Account! What brokers allow this? Doesn't this violate Federal regulations governing IRA's?
IB does this but with restrictions. You cannot use "debt leverage" in any tax-advantaged account (e.g. IRA, 401[k], pension). You cannot sell securities short, though some brokers allow selling futures.
My IB IRA has restricted margin. This means I can have option spreads (i.e. long one option, short another) as long as they're limited risk. TOS has the same kind of IRA.
I don't understand this. Why are you not able to sell your stock anytime and must hold them for 2-3 days? You can buy any equity with an IRA, and can sell it at any time (even just one minute after you have bought if you change your mind). It's just that the proceed will not be released for you to buy again until after the trades are settled. (T+3)