I bought about 30k worth of stocks a couple of weeks ago. As soon as the settlement day came and I was 'CHESS registered', my trading funds amounted to my portfolio value of around 22k. I've only got 1k in my actual trading bank account but on Friday I bought 5k of BHP stock - which got deducted fromthe portfolio value, bringing down my 'funds available for trading' down to 17k. (the 1k in my bank account remained).
So In summary my 'Trading Funds' are as follows:
CASHMG Account - 1K
Reserved Ammount - $0
Portfolio Value - $22K
Trading Account Balance - -$5,000 (the BHP purchase)
Value of Open Buys - $0
Funds available for trading - $17K
Basically I rushed into making a BHP purchase on friday because I felt it was a good buy. I obviously didn't investigate into who/what was actually going to pay for the purchase....
When I go into my 'Holding' tab, down the bottom it says 'Ledger Balance' -$5,000 (im not sure what that is)
In my contract note, it says (just like with all my previous purchases) that my bank account will be debited on specified settlement date. Now as I have said, I have only 1K in my bank account, which is obviously not enough to pay for the stock purchased.
My questions are:
1. What the hell is going to happen on settlement day as I dont have the funds to pay?
2. Why did Westpac broking let me buy the shares If I don't have the money to pay for them? (Obviously I am an idiot by not investigating but at the time I thought it was like a margin loan or something)
3. Later after going through the Westpac broking website I realised that you actually have to sign up separately for Margin lending and I've never done that - which is the main reason I am so paranoid right now - especially since the contact note said that it will be debiting my bank account which doesn't have the appropriate funds...)
Basically can someone please explain to me what is going to happen and whether I have just made a very big mistake. And why does Westpac broking let you buy shares with money you dont have - I could by $17k more shares according to them but I have only $1k in my bank...
I would appreciate some assistance!
Thanks in advance.