livesoft wrote: ↑
Tue Mar 27, 2018 7:02 pm
Are there other possibilities?
In a cash account, some brokers wouldn't have let you place the trade even if the ask were 1 penny lower, because they require for example a 5% cushion against the price moving after you click Submit.
In the past, some brokers wouldn't even let you place a limit order to buy if you didn't already have settled funds in your (cash) account. I don't know of any that still do this.
I did once place a limit order hoping to result in a balance just above zero, but had the order execute so that my balance was just below zero. So I sold a single share of something else, as planned in case of a negative balance.
Now I'm generally happy to use odd and mixed lot market orders, so next time I'll probably just buy one share less.
By "balance" above, I mean the amount available for purchasing stock shares today, including unsettled funds.
It might be against your broker's rules, but I doubt it's against regulations to have that balance appear negative for a moment, as long as it isn't negative overnight.
I don't know the details of how this works... above ftobin says to have funds by the settlement date. It seems ok to not have funds until the settlement date itself. Such as if you have no funds, sell one stock, and immediately buy another with the unsettled proceeds. At some brokers, maybe you could place the buy first and then the sell, without running into problems?
I don't know if any brokers still do this, but some have allowed you to purchase mutual fund shares without having funds available in time, for example if you sell stock shares and then use the unsettled funds to purchase a mutual fund which settles more quickly than stock shares.
From a brief discussion with a broker once, I suspect some of this comes down to how a brokerage interprets the regulations. And I suppose that includes how aggressive or conservative they want to be.
Of course, some brokers will have rules that are not required by regulations.