After buying a stock how soon can I sell it?
If I buy a stock today can I sell it tomorrow or do I have to wait three days untill the settlement date?
- 8 years agoFavorite Answer
I'm assuming you are buying thru online trading. As soon as you buy the stock you own it. If you want, you can sell it right away, as in a minute later. Just be sure you own it first. To confirm this, go to your account, and there should be a link called "Account Positions" or something to that effect. That will tell you what you currently own.
- Anonymous3 years ago
1Source(s): Make Money Investing in Stocks http://teres.info/TheTradingCode
- A nobodyLv 78 years ago
You can sell a stock immediately after purchasing it. You do not have to wait until the settlement date of the purchase.
HOWEVER, all purchases must be paid in full (or proper margin deposited before a security can be sold. If you sell without paying your account is restricted for 90 days or until payment in full is made and you can not use the proceeds of the sale to cover the purchase.Source(s): from the street
- RaysorLv 78 years ago
In theory you can sell it straight away. In practice it depends on your platform provider. Basically you need to get the settlements to coincide. That is if you sell same day then deal T+3, next day sell T+2 and next day T+1. After that you have paid for the purchase and should be able to sell how you like.
If you buy T+10 (if they allow it) then again sell with coinciding settlement: T+9, T+8 etc.
- How do you think about the answers? You can sign in to vote the answer.
- zman492Lv 78 years ago
You can sell a stock you own as soon as you have paid for it.
You can sell a stock you own as soon as you have paid for it. To determine when you have paid for it requires a little background information.
First, as it appears you already know, settlement of a stock trade does not occur until the third business day after the trade. So if I buy a stock on Monday, the regulations say I do not have to give the brokerage the money for the purchase until Thursday. [Brokerages may have stricter requirements than the regulations require, so a brokerage may require you to have deposited the funds for a trade before you make the trade.] Similarly, if I sell a stock on Monday the funds from the sale are not available in my account until Thursday.
Second, there are two basic types of accounts for individual investors, cash accounts and margin accounts. A margin account allows you to use holdings in your account as collateral for a loan from your broker.
Third, if you make too many trades in your account in a short period of time you will be classified as a "day trader". Day trading is only allowed in accounts of $25,000 or more. If you do not have $25,000 in you account and get classified as a day trader you brokerage is required to limit your trading for a period of time, which could have an impact on how soon you could sell a stock.
Here is an example of how a person could violate the "free riding" rule. Assume John has an account with $10,000 in it. On Monday he pays $7,000 for some stock. Tuesday morning he sells that stock for $7,300. Tuesday afternoon he buys $5,000 worth of another stock. Wednesday he sells the stock he bought Tuesday for $5,050. The sale on Wednesday violated the free-riding rule because he had not paid for that stock before he sold it. You can see why if you look at what was in his account after each transaction. After the trade on Monday, he had $3,000 available in his account. After the sale of the stock on Tuesday he still only had $3,000 in his account; the $7,300 from the sale would not be deposited into his account until Friday. When he bought the second stock Tuesday afternoon he was buying stock for $5,000 when he only had $3,000 in his account. This was not a problem because the settlement date for the purchase was Friday, and on Friday the $7,300 from the sale would be deposited into his account. The problem occurred on Wednesday when he sold the second stock. He had not fully paid for the stock he was selling. He needed funds from the first sale to pay for the second stock.
Note that John would not have violated the free-riding rule if:
(1) He had only sold half the stock he bought on Tuesday. Half of the stock he bought cost $2,500 and he still had $3,000 in cash to cover that amount.
(2) He had a margin account. With a margin account the broker would lend him $2,000 go with the $3,000 he already in the account in order to cover the entire $5,000 purchase.
In summary, you do not have to wait for the settlement date of the purchase, but you do have to wait for the settlement date of a previous sale if you needed the funds from that sale to buy the stock.
- Howard LLv 78 years ago
You don't even need to own a stock to sell it so you could sell it before you bought it. It's called short selling.
- Anonymous8 years ago
There is no restriction on when you sell it , even you can sell it within few minutes
- Anonymous8 years ago
Sort of depends. If it is a non-margin account 3 business days. If it is a margin account and this is a one time deal you can sell it anytime you want, 2 seconds later if you like. But if your margin account has a value of less than $25,000 your account will be frozen if you do it more than a couple of times within about a 6 month period or something like that.
- 8 years ago
It depends on what type of account at the trading house you have. Regular account you need to get the share statement then turn it back in to the trading house before you can sell it. It sucks.
- Anonymous8 years ago
It all depends on the where you bought and what their rules are. Depending on who you're going through, sometimes it takes a couple of days for things to process.