Jump to content
onlyjava

SCHWAB / THINKORSWIM - HOW T+1 SETTLEMENT WORKS WITH A CASH ACCOUNT

Recommended Posts

Posted (edited)


SCHWAB / THINKORSWIM - HOW T+1 SETTLEMENT WORKS WITH A CASH ACCOUNT

I switched a trading acc with Schwab from Margin to Cash mid-day yesterday. I do options day trading in this acc - only long options (buying calls and puts) - so a cash acc works well for me - don't need the margin and the PDT restrictions.

Here's some important info for Schwab/TOS from TOS support:
11:50 Adam_V: When you make a daytrade in a cash account, you will see your buying power replenish immediately
11:50 Adam_V: Even though the funds are not settled
11:51 Adam_V: It is much easier to incur a good faith violation as a result
11:51 Adam_V: For trading on unsettled funds
11:51 Adam_V: We recommend adding in the "Cash Available for Withdrawal" balance to keep track of how much you have in Settled Funds for trading

Yesterday, after an options day trade in TOS in the new Cash acc, predictably, my "Cash Available for Withdrawal" dropped by the amount I spent on buying the options. ("Available Funds For Trading" showed the higher settled value - which the TOS support warned about).
This morning, "Cash Available for Withdrawal" is at the settled amount.
So with T+1 settlement, at least for Schwab/TOS , the settled funds are available the next day morning - awesome!

To avoid cash acc trading violations, in TOS, trade with funds within the "Cash Available for Withdrawal".
https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations

 

EVEN WITH A CASH TRADING VIOLATION THE WORST THAT CAN HAPPEN:

SCHWAB WILL REJECT YOUR ORDERS IF YOU GO BELOW THE SETTLED FUNDS FOR THE DAY

 

Edited by onlyjava

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.