Question Regarding Sweep Accounts

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Topic Author
DJ86
Posts: 3
Joined: Fri Nov 03, 2017 2:17 pm

Question Regarding Sweep Accounts

Post by DJ86 »

Hello,

Quick background: I've been investing for a month and just got approved for a margin account. I am set up with TDA, and they've automatically enabled a sweep account with my new Margin account.

I placed a trade this morning and half the profit went to my cash account and then the other half got swept. My Balance shows I can only withdraw the cash and not the other half automatically deposited in the Sweep Account. Also, the trade wasn't done on margin..

How does this work? Will it always sweep 50%? And more importantly, will I ever be able to withdraw the money swept?

Thank you
bloom2708
Posts: 9861
Joined: Wed Apr 02, 2014 2:08 pm

Re: Question Regarding Sweep Accounts

Post by bloom2708 »

Welcome to Bogleheads.

Read up on the wiki and the type of investing that is preferred here.

It sounds like you are day trading/gambling. Margin trades and sweeps. I'd close that account and move on.

Open an account at Vanguard or Fidelity and do a buy and hold of low cost, broad based, diversified index funds.
Topic Author
DJ86
Posts: 3
Joined: Fri Nov 03, 2017 2:17 pm

Re: Question Regarding Sweep Accounts

Post by DJ86 »

Sorry if the post was inappropriate, I am just seeking an answer to this. At least for me day trading has been profitable with some holds, but thank you for the advice :sharebeer
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CABob
Posts: 5091
Joined: Sun Feb 25, 2007 7:55 pm
Location: Southern California

Re: Question Regarding Sweep Accounts

Post by CABob »

I don't understand what has happened, but I think it is a question that should be directed to TDA for an explanation.
Bob
123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: Question Regarding Sweep Accounts

Post by 123 »

If you did a stock trade this morning it would not settle for 2 days (T+2 - next Tuesday). It's probably best to call TDA since they could properly interpet your account activity.
The closest helping hand is at the end of your own arm.
TropikThunder
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Joined: Sun Apr 03, 2016 5:41 pm

Re: Question Regarding Sweep Accounts

Post by TropikThunder »

DJ86 wrote: Fri Nov 03, 2017 4:56 pm Sorry if the post was inappropriate, I am just seeking an answer to this. At least for me day trading has been profitable with some holds, but thank you for the advice :sharebeer
Not so much that the post was "inappropriate" [Don't Bite The Newbies] but most people on here will have no idea what you're talking about. :P
livesoft
Posts: 86080
Joined: Thu Mar 01, 2007 7:00 pm

Re: Question Regarding Sweep Accounts

Post by livesoft »

I've had a margin account at TDAmeritrade for more than 20 years.

One would have a sweep account whether one had a margin account or not, right? That is, one would have a cash settlement account regardless.

I don't understand what you did. You placed a trade and .... Did you do a buy or a sell? Or both?

It takes time for trades to settle. Until a sell transaction settles, one doesn't have complete access to the money --- unless one borrows money from the broker on margin. Typically, one cannot borrow more than half the value of one's account. And when one borrows money, then one pays interest.
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Topic Author
DJ86
Posts: 3
Joined: Fri Nov 03, 2017 2:17 pm

Re: Question Regarding Sweep Accounts

Post by DJ86 »

Yes, so what I did was buy a stock in the A.M. and sold it within the morning. I did contact TDA and they confirmed what was already said here, thanks! It was the unsettled funds, and I am able to withdraw the amount swept after settling.

For anyone else out there: you can disable this, but at the cost of losing your FDIC Insurance on your excess cash.

Thanks again! :sharebeer
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