If you don't have a margin account you have to wait for the cash to settle. That's with any broker in the US.
I'm not sure if it's even possible to do 1 day trade in a cash account. Im still confused by the rules.
Can anyone name another buy sell system which operates this way in any business? Esp in this day of the computer and instant money and face it the trades probably clear instantly anyways.
You guys are all repeating the rules. My question is "WHY"? What possibly can go wrong if I trade 500 million times aday? Why when I sell, my the money is not there? My point is that it is a silly useless rule. I believe no danger faces the broker if they (SEC or brokers) remove the rule.
Here's the problem: Assume you have $1 in your account. Your broker won't stop you from making any trades (i.e. if you decided to buy a stock worth $5 (assume no commission). This puts your account at $-4, which your broker won't stop you from doing. Assume stock goes up to $6 that day. You then sell and make $1 profit. This is why it's a free ride and is not legal. You could technically use money you don't have to buy stock and make a profit.
I don't think the OP was talking about the Day Trading margin rule. You trade stocks in a cash account (or 401K, IRA). It is subjected to the T+3 days for settlement. This is from the old days. It used to be T+5 days. There are people who do not hold stocks in street names and they demand the stock certificates. When they sell their stocks, SEC allows them 3 days to send their stock certificates to the brokerage firm to clear the trade.
You could technically use money you don't have to buy stock and make a profit. -------------------- Ah..... the old "rent a balance sheet" ploy. Ahem... wall street will have none of that.
Why do I have to do anything that doesn't make sense to me if the rules/laws say that I have to do it that way ??? Deal with it