Question about unsettled funds


Hey so im a cash investor and generally just buy and hold.

But i've been getting more proactive about my trades

I understand the rule the good faith violation of selling a stock, and then buying ANOTHER stock.. and then selling it before the funds had settled from the first sell.

But.. lets say hypothetically.. im trading a volatile stock.

So lets say i have shares of a stock (settled) and I decide I want to sell them.. So now i have unsettled funds.

Lets say the stock I sold now dips before the funds settle..

Can I use teh unsettled funds to rebuy the same stock? assuming of course I don't re-sell it until the first sell of the stock settles? or is this a violation of the free riding rule?

I understand I could probably avoid any issue with applying for a margin account but not sure im ready to take that step yet.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *