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Hypothetical question - turn around time

Discussion in 'Beginner's Lounge' started by sam179, Jan 10, 2012.

  1. sam179

    sam179

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    Hi

    I am new to the stock market and have a question.

    Hypothetically if I have a total of $10 000 and I buy $10 000 worth of shares in company XYZ today at 11am, the price goes up and I sell these shares for $11 000 at midday. Is there any way I can have the $11 000 available for me to buy $11000 worth of shares in company ZZZ at 2pm today? Or does there have to be a minimum of 3 days for settlement?

    Thank you in advance :)
     
  2. wayneL

    wayneL Rotaredom

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    Re: hypothetical question - turn around time

    That's not a problem with any broker I've ever used. Buy and sell as many times per day you want.

    Not saying you should, but you can.
     
  3. pixel

    pixel DIY Trader

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    Re: hypothetical question - turn around time

    +1

    I've never used an online broker that wouldn't net off all buy and sell transactions in real-time. That means, assuming I started the day with $10,000 in the bank and some shares in the portfolio: even if I bought $10,000 worth of abc and then sold $10,000 worth of bcd, my account would immediately be back up at $10,000 available to buy.

    Some brokers, e.g. Westpac, will even let me buy more than the cash that's currently in the account, up to a substantial percentage of my portfolio value. Of course, they assume that I sell enough before Market Close to balance the ledger again and show a positive cash balance.
    Please note that this may not be offered to everybody; I've been their client "since last century" :cool:
     
  4. Logique

    Logique Investor

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    What Wayne said, but keep in mind the transaction fees affecting the gross.
     
  5. sam179

    sam179

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    Hi Wayne, pixel and logique ; thank you for clarifying that :)
     
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