How many times can you buy and sell the same stock in non-margin cash only brokerage accounts?

Tuesday, 15 September 2009 17:55

Q. How many times can you buy and sell the same stock in non-margin cash only brokerage accounts?

A. The general answer is UNLIMITED. However, there is a restriction on HOW FREQUENTLY you can buy and sell the same stock. Day trading rules require, that you have at least $25,000 cash or equivalent on your account to be able to DAY TRADE. That means, you can buy and sell the same stock within 1 day only 4 times, before your trading will be prohibited. That's a policy, which every broker follows. In reality, you want to have even more funds, because stocks fluctuate, and you want to be sure to maintain the $25,000 balance at all times. So you end up depositing at least $28,000.

So if you are making a trade and you don't have $25,000 in your account, make sure you think through your strategy and invest over at least 4+ day period to avoid Day Trading restrictions.

Good luck, high gains on your trades!

Moni.