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Types of Accounts

post #1 of 5
3/15/06 at 3:00pm
Thread Starter 
I have an Ameritrade Cash account.

I would like to know more about the pros and cons of the different types of accounts. Cash vs. Margin

I currently have a five diffrent balances numbers

cash Value
funds avail for trading
funds available for withdraw
NON-marginable funds
account value

I'm mostly curious as to the Non-Marginable funds. As this is the number that seem to have to have a value before i can buy pinkies. It is also the last number to get a value after i deposit funds or sell something and I have to wait. for the funds to get there before i can buy. Would a margin account clear this waiting period up?

thanks for your helping a poor newbie out.
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post #2 of 5
3/15/06 at 5:20pm
Always get a margin account, you dont need to use margin, but its good to have it.

Right now since you are cash only, you have a T+3 (trade+3day) rule that stops you from trading until the funds have settled from the last trade. If you have a margin account, you are not restricted by the T+3 rule.

If you have $1000 in a margin account, you will have $2000 worth of buying power. Stick to trading with your $1000 dollars and dont use the extra $1000 of margin.
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post #3 of 5
3/15/06 at 5:35pm
Thread Starter 
great! i think that answers my question!!

Thanks I'll go switch to margin mode...

then like you said I'll have the ability to basically day trade if the situation arises, and not have to worry about the silly 3 day settle period.
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post #4 of 5
3/15/06 at 5:43pm
Actually no, you cant really daytrade since that will require a $25,000 account. Read over the daytrading guidelines offered by your broker.

If you buy and sell a stock on the same day, thats fine, but if you buy it again that same day, you are flagged as a daytrader and your account can be frozen.
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post #5 of 5
3/15/06 at 7:04pm
Thread Starter 
I got it now!!

Thanks

yeah i meant sell then buy in same day. Not necessarly same stock.

And no more than 4 round trips in 5 day period. unless i have at least $25,000 accout value.
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