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free riding violations-etrade

post #1 of 12
Thread Starter 
Hi All, great site. I was hit with a 90 day cash only restriction earlier in the year for free riding. If I do it again, will etrade permanantly close my account? I can handle another cash only restriction, just don't want to risk my broker closing me out. I've searched everywhere and haven't found anything specific to this. Etrade doesn't even seem to have this specified. Thanks

edit-i don't have a margin account but have just applied for one.
post #2 of 12
Quote:
Originally Posted by GSR View Post
Hi All, great site. I was hit with a 90 day cash only restriction earlier in the year for free riding. If I do it again, will etrade permanantly close my account? I can handle another cash only restriction, just don't want to risk my broker closing me out. I've searched everywhere and haven't found anything specific to this. Etrade doesn't even seem to have this specified. Thanks

edit-i don't have a margin account but have just applied for one.
You can't do a free ride period. That applies to an S restriction as well. Just don't do it. If you don't set market orders and use limit orders that'll help. Do you understand what a "free ride" violation means?
post #3 of 12
Thread Starter 
Quote:
Originally Posted by USMC View Post
You can't do a free ride period. That applies to an S restriction as well. Just don't do it. If you don't set market orders and use limit orders that'll help. Do you understand what a "free ride" violation means?
selling, then buying, then selling the 2nd trade before the 1st trade settles? maybe i have my terms mixed up.
post #4 of 12
Quote:
Originally Posted by GSR View Post
selling, then buying, then selling the 2nd trade before the 1st trade settles? maybe i have my terms mixed up.
That's an S violation. If you're on a cash account, you have to hold the stock for 3 + 1 days before you can sell it as it's not settled. If you initially buy it with settled funds, that doesn't apply.

A free ride is basically buying a stock with money you don't have.
post #5 of 12
Quote:
Originally Posted by GSR View Post
selling, then buying, then selling the 2nd trade before the 1st trade settles? maybe i have my terms mixed up.
That is correct, and getting a margin account will make it so you never have to worry about that again. You do however need to abide by the day trader rule of 3 day trades in a 5 rolling day period.
post #6 of 12
Quote:
Originally Posted by simonyadig View Post
That is correct, and getting a margin account will make it so you never have to worry about that again. You do however need to abide by the day trader rule of 3 day trades in a 5 rolling day period.
Isn't my below correct? That's my understanding. There's a difference between a Free Ride and an S Violation.
post #7 of 12
Quote:
Originally Posted by USMC View Post
Isn't my below correct? That's my understanding. There's a difference between a Free Ride and an S Violation.
What you described and what the OP described are both free ride violations.
Buying with unsettled funds, then selling that new position before those original funds settled.


I've honestly never heard of an S violation, but it may just be the technical term for free ride violation (maybe s is for settlement).
post #8 of 12
Quote:
Originally Posted by simonyadig View Post
What you described and what the OP described are both free ride violations.
Buying with unsettled funds, then selling that new position before those original funds settled.


I've honestly never heard of an S violation, but it may just be the technical term for free ride violation (maybe s is for settlement).
Ohh OK same thing I guess. Once you have an S restriction, they lock you down and you cannot even trade, unless you have settled cash, until after the 3 day settlement, then you can trade with those funds (if you're already on that restriction) That's the way it way explained to me. I was told a free ride is basically buying a stock without any funds, such as going over a few bucks verse a market order and limit order. You're right- same thing.
post #9 of 12
Thread Starter 
Quote:
Originally Posted by USMC View Post
That's an S violation. If you're on a cash account, you have to hold the stock for 3 + 1 days before you can sell it as it's not settled. If you initially buy it with settled funds, that doesn't apply.

A free ride is basically buying a stock with money you don't have.
but technically speaking they couldn't stop me from selling, i would get hit with that violation though. i may lose some more money tomorrow on a stock i should get out of, i just don't know if i should risk the violation again.

thanks for the replies guys. and thanks for your input on the HESG thread, this is the stock i want to get out of actually. I was thinking I would hold it a few days, but todays downturn has me worried. stupid time to get in and i'm sure i'll pay for it.
post #10 of 12
Quote:
Originally Posted by GSR View Post
but technically speaking they couldn't stop me from selling, i would get hit with that violation though. i may lose some more money tomorrow on a stock i should get out of, i just don't know if i should risk the violation again.

thanks for the replies guys. and thanks for your input on the HESG thread, this is the stock i want to get out of actually. I was thinking I would hold it a few days, but todays downturn has me worried. stupid time to get in and i'm sure i'll pay for it.
They're all pump and dumps. You just have to be careful. It may rebound and bounce, but they always dump. 99.999% of Pinks are garbage. Don't get caught up in the hype.

If you violate again they can dump you as far as I know. They'll lock-up your account.
post #11 of 12
Thread Starter 
Quote:
Originally Posted by USMC View Post
They're all pump and dumps. You just have to be careful. It may rebound and bounce, but they always dump. 99.999% of Pinks are garbage. Don't get caught up in the hype.

If you violate again they can dump you as far as I know. They'll lock-up your account.
Got in on an HTDS pump in july at just the right time and did very well. That probably boosted my confidence up too much.
post #12 of 12
HTds is the biggest scam out there. I've honestly done hours of research on that racket. There's also a couple of pumpers on that thread too.
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