How are Funds Available for Cash Trades calculated and what is the rationale?
Transactions Display You will now see your funds available for transactions in cash accounts broken out into two amounts when you click on “Details” displayed next to your balance. • The amount labeled “Securities” is the dollar amount that is available for purchases of securities that will settle T+3 (Trade Date plus 3 business days). (i.e. Stocks) • The amount labeled “No-Load Mutual Funds” is the dollar amount that is available for purchase of securities that will settle T+1 (Trade Date plus 1 business day) (i.e. No-load mutual funds). Trading Restrictions in Cash Accounts Regulation T requires you to make full cash payment when purchasing securities in cash accounts. Funds must be settled before new purchases can be made. The definition “Full cash payment” is met by the use of settled funds, i.e. cash on deposit or the proceeds from the sale of a fully paid for security. For example: At the beginning of the day, a client holds $10,000 cash in a cash account. The client then attempt
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- How are Funds Available for Cash Trades calculated and what is the rationale?
