Can I buy and sell in one day?
- Thread starter glk2000
- Start date
-
- Tags
- buy buy shares sell sell shares
- Joined
- 22 November 2010
- Posts
- 3,661
- Reactions
- 11
Re: buy and sell in one day
The instant you have bought them they are yours to hold or sell!
You can buy another share straight away, in fact, you can buy as soon as you have enuff funds to cover the transaction.
The instant you have bought them they are yours to hold or sell!
You can buy another share straight away, in fact, you can buy as soon as you have enuff funds to cover the transaction.
- Joined
- 22 November 2010
- Posts
- 3,661
- Reactions
- 11
Re: buy and sell in one day
Settlement goes back to times before internet, when you would send a cheque to the broker and he couldn't settle immediately.
There are still some telephone transactions today, so the broker feels justified to hold your cash, even if he received it instantly.
IMO this stinks, but I rarely cash out anyways
Settlement goes back to times before internet, when you would send a cheque to the broker and he couldn't settle immediately.
There are still some telephone transactions today, so the broker feels justified to hold your cash, even if he received it instantly.
IMO this stinks, but I rarely cash out anyways
pixel
DIY Trader
- Joined
- 3 February 2010
- Posts
- 5,359
- Reactions
- 346
I wouldn't know why "it stinks"; the Broker doesn't get your money either - at least not if you trade via an online broker. It may be different if you use one of the "Full Service Brokers"; from memory, however, I seem to recall that they too had direct debit/ credit authority to my account, and they would transact not on the day I made the phonecall, but like now, on "T+3".
So, in reply to GLK's question: If you're using an online broker, not only are the brokerage rates a fraction of what an FSB would charge, but as soon as your buy order is reported as filled, you own the bundle; if you know you won't have the cash in your bank account 3 days hence, you better pray that they rise and you can sell them at a profit on the same day. Or you see them rise and hit resistance, so you decide to take profit immediately. Three days later, you will find your account has been credited with the difference, minus two lots of brokerage.
Some brokers (Westpac is one of them) even accept the value of your share portfolio as "collateral" allowing you to buy - and sell on the same day - up to the combined value of your current cash and portfolio balance.
You can take advantage of this feature (which may also explain why I don't agree that it stinks)
Say you have found a stock that moves quite regularly a few cents down and up again inside an ordinary day. CFE is a good example: starts near previous Close, drops back over lunchtime, then recovers a couple of cents. Buy 10,000 at an Intraday Low and sell a cent or two higher. For every 10,000 shares, one cent difference pays you $100. Subtract the brokerage - most onliners will charge no more than $25 one way. You do the Maths
I trade through PariTrade and can buy and sell the same stock a dozen times in a day and they still charge me only one brokerage per contract note: $25 minimum, 0.1% if the total amount is above $20K. Other onliners have similar offerings.
The crucial point is: Buy and Sell orders are treated exactly alike - cash settles on Day 3.
So, in reply to GLK's question: If you're using an online broker, not only are the brokerage rates a fraction of what an FSB would charge, but as soon as your buy order is reported as filled, you own the bundle; if you know you won't have the cash in your bank account 3 days hence, you better pray that they rise and you can sell them at a profit on the same day. Or you see them rise and hit resistance, so you decide to take profit immediately. Three days later, you will find your account has been credited with the difference, minus two lots of brokerage.
Some brokers (Westpac is one of them) even accept the value of your share portfolio as "collateral" allowing you to buy - and sell on the same day - up to the combined value of your current cash and portfolio balance.
You can take advantage of this feature (which may also explain why I don't agree that it stinks)
Say you have found a stock that moves quite regularly a few cents down and up again inside an ordinary day. CFE is a good example: starts near previous Close, drops back over lunchtime, then recovers a couple of cents. Buy 10,000 at an Intraday Low and sell a cent or two higher. For every 10,000 shares, one cent difference pays you $100. Subtract the brokerage - most onliners will charge no more than $25 one way. You do the Maths
I trade through PariTrade and can buy and sell the same stock a dozen times in a day and they still charge me only one brokerage per contract note: $25 minimum, 0.1% if the total amount is above $20K. Other onliners have similar offerings.
The crucial point is: Buy and Sell orders are treated exactly alike - cash settles on Day 3.
- Joined
- 22 November 2010
- Posts
- 3,661
- Reactions
- 11
I trade with netwealth where the money is held in a trading account in advance of transactions. I forgot to ask. I assumed glk2000 was also paying up front. Sorry to confuse.
pixel
DIY Trader
- Joined
- 3 February 2010
- Posts
- 5,359
- Reactions
- 346
Thanks for clarifying that, burglar.
(and no need to say Sorry
)If that's how some brokers are still operating, that would exclude hem from the group in which I would look for a new facilitator. Not saying that I'm looking ...
- Joined
- 22 November 2010
- Posts
- 3,661
- Reactions
- 11
... Not saying that I'm looking ...
I am thinning deeply about looking for a new facilitator. It is just so hard to galvanise myself into action. Been with them for a decade, they are cheep, reliable, trustworthy.
On the downside, the newest "intuitive" platform is almost no improvement on the old.
I still don't get trailing stop-loss or those things that lock down profits.
C'est la vie!
