T+3 Settlement

[maffu]

Hi guys,
cant do a search for T+3 so no idea if this has been covered, but i was wondering when contracts through Brokers are settled T+3 if i do an intraday trade how does it work?

Example:
I have $1000 in my account, i buy $2000 of shares at 10:00am, sell them at 2pm for $3000, in 3 days do i just get $1000 placed in my account, ie is it a net settlement? Or does it try to take out $2000(and give me a dishonor fee because i dont have enough money) and then put in $3000?

Im assuming that its a net settlement and that ill just receive 1 note on my statement receiving $1000 extra.

 

[Ken]

are you sure your not talking about crown casino...

you think you can turn $2000 into $3000 in 4 hrs.

what have you been smoking.

in the past when i make several trades in a day its a net figure that is either taken out or put into my account depending on the trades

 

[SevenFX]

Im assuming that its a net settlement and that ill just receive 1 note on my statement receiving $1000 extra.

Hi Maffu.

You are Correct and will see difference generally 1 day after T3 (bank transfer delay)...as I do, despite transferring from Commsec to CBA's cdia account....

This type of trade is usually called T1, where you buy/sell in the same day or even sell the next day.

BEWARE.... this type of trade may go against you and you may have to hold (restless night, as some may have experienced) or worse still sell within T1 at a loss ....

Needless to say you are putting unneccessary preasure on your trade, and unless your are confident, you may need to factor holding or wearing the loss, if the trade doesn't go your way.

I can say it can be done in less than 4hours, actually minutes......which all depends on your position size and/or the trades movement for the day.....like gdn today

Don't know your experience in the market, but there are many that I''m sure will tell you it's all possible.....Caution: it can also turn against you and you could lose 10/100/1000'ss if you run naked (no stop loss) and don't close your position or decide you need a coffee break during a higher risk trade...

A few trades I had recently success with and made some green folding stuff...are nlx, pmh, aar, auz...etc all small caps

A few trades I didn't have sucess with are cdu (again), eng, etc.

These profits/losses above all happened with minutes, if not hours.

Cheers
SevenFX

 

[maffu]

Thanks for the answer SevenFX
It was just so i knew if i had to transfer money from my High Interest bank account into my normal account which Comsec direct debits from.


Ken: The numbers i used were just random rounded numbers, im not fooling myself into thinking im going to be making 50% returns in a few hours :S

 

[SevenFX]

Thanks for the answer SevenFX
It was just so i knew if i had to transfer money from my High Interest bank account into my normal account which Comsec direct debits from.

H Maffu,

When you are a successful Investor/Trader you may want to give that Quote "High Interest bank account " up, as the returns here will put it to shame, BUT unfortunaley NOT guananteed.

Also worth noting a CBA CDIA account holds no monthly fees or transaction fees, but Commsec run a very tight ship if your overdrawn even by few dollars ($7 actually)

The numbers i used were just random rounded numbers, im not fooling myself into thinking im going to be making 50% returns in a few hours :S

In my last post I mentioned GDN which gapped up from 74.5cents last night to 81.5cents on open then fell to 75.5cents and rocketed to 95cents within 4minutes...and went further later in the day.

This has been a exceptional run for GDN which opened at 32cents 4 days ago....and these don't come every day but they do, and for that matter have done for me for the last few months...

As mentioned these are exceptional, as not ones you can count on or expect to even see....but if you do...it will put a smile on your dial....

Cheers
SevenFX

 

[arlee123]

are you sure your not talking about crown casino...

you think you can turn $2000 into $3000 in 4 hrs.

what have you been smoking.

in the past when i make several trades in a day its a net figure that is either taken out or put into my account depending on the trades

Maybe if there is a sudden announcement of take over bid

 

[bbi1]

If you buy then sell the same stock within 3 days of buying it, does the initial buy amount come out of your cash management account to settle the trade or it just cancels itself out?

 

[burglar]

If you buy then sell the same stock within 3 days of buying it, does the initial buy amount come out of your cash management account to settle the trade or it just cancels itself out?

Every broker is different.
Ring or email your trading room!

 

[pixel]

If you buy then sell the same stock within 3 days of buying it, does the initial buy amount come out of your cash management account to settle the trade or it just cancels itself out?

that depends on your broker.
You'll have to ask them. Westpac will net debits and credits off. From memory, Commsec used to do something similar. OpenMarkets debits and credits my bank account for each trade precisely on T+3.

 

[So_Cynical]

If you buy then sell the same stock within 3 days of buying it, does the initial buy amount come out of your cash management account to settle the trade or it just cancels itself out?

HSBC / Bell Direct let you same day trade, IB makes me wait 3 days till it settles...even AustSuper allows same day sell then buy.

 

[nulla nulla]

If you buy then sell the same stock within 3 days of buying it, does the initial buy amount come out of your cash management account to settle the trade or it just cancels itself out?

that depends on your broker.
You'll have to ask them. Westpac will net debits and credits off. From memory, Commsec used to do something similar. OpenMarkets debits and credits my bank account for each trade precisely on T+3.

Commsec generally allow an offset of same day trades and/or T1 trades. Sometimes they can hold back funds from sales to cover purchases occurring within the T3 period. You would have to read their terms and conditions for the full settlement variations.

 

[pixel]

Commsec generally allow an offset of same day trades and/or T1 trades. Sometimes they can hold back funds from sales to cover purchases occurring within the T3 period. You would have to read their terms and conditions for the full settlement variations.

Just to clarify:
OpenMarkets - and many others, I'm sure - do keep track of unsettled trades; they let me buy up to the amount of funds that will be in my account by the time today's purchase becomes due. In other words, as soon as I've sold a position, I can buy another position up to the amount of the proceeds (less brokerage).

Westpac will even go one step further and allow me Intraday trades that may exceed the projected account balance, as long as the total owed is covered by the sum of cash in bank and value of unsold shares held. At the end of the trading session, the balance will of course have to be covered by actual sales.

I don't know which of the two methods is referred to as T1; nor do I really care because I'm not normally sailing that close to the wind that I have to worry whether my trades will be covered come T+3.

 

[ROE]

If you been with comsec for a while you can buy as much as want on $0 balance
as long as you have settlement money by T+3.

I do this all the time but I usually have my money stack in oncall high interest account and if the trades is not gone in 3 Days I bring the money across for settlement else I pocket a few K profit.

My settlement account never have any money in them period