What are the trading restrictions on Vanguard ETFs? [Brokerage service]

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HenryPorter
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What are the trading restrictions on Vanguard ETFs? [Brokerage service]

Post by HenryPorter » Mon Nov 02, 2015 6:50 pm

From what can find on Vanguard's site, you are limited to 25 round-trip trades per a year for a Vanguard ETF before they will cut you off for 60 days for the ETF. Apparently, there is no minimum holding time for them, unlike TD Ameritrade which requires 60 days holding to avoid a sell commission. Am I reading that right?

https://personal.vanguard.com/us/whatwe ... ommissions

I guess I am surprised that Vanguard is much less strict on the ETF buying and selling versus their mutual funds. I kind of expected a similar set of rules.

livesoft
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Re: What are the trading restrictions on Vanguard ETFs?

Post by livesoft » Mon Nov 02, 2015 6:52 pm

TDAmeritrade requires only requires a 30-day holding period to avoid a $19.99 commission for selling if one signs up for the no-commission deal. However, one doesn't have to sign up for the no-commission deal and/or your TDAm rep will give you some free trades whenever you ask for them.

I cannot imagine that Vanguard would "cut you off". I can see where they would charge a commission though. I see where Vanguard writes "you may …", so that word "may" gives them a lot of leeway.
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HenryPorter
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Post by HenryPorter » Mon Nov 02, 2015 7:22 pm

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Daryl
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Re: What are the trading restrictions on Vanguard ETFs?

Post by Daryl » Mon Nov 02, 2015 7:26 pm

livesoft - Could you share more about the the "free trades" from your TD Ameritrade rep? Could this be tied to your account size with the firm? I just opened an account with them a couple months ago. I was thinking about just sticking with the Total Bond Market EFT (BND), which is on their "commission free list", but might look at other Vanguard Bond ETFs if the price was right :)

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Re: What are the trading restrictions on Vanguard ETFs?

Post by Kix » Mon Nov 02, 2015 7:34 pm

This makes me wonder if I can tax gain harvest out of VTSMX into VTI. Hm, anyone know?

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Re: What are the trading restrictions on Vanguard ETFs?

Post by Daryl » Mon Nov 02, 2015 7:47 pm

Kix wrote:This makes me wonder if I can tax gain harvest out of VTSMX into VTI. Hm, anyone know?
These are different classes of the same fund. This would almost certainly trigger a wash sale.

Edit to add - If you are trying to harvest gains, why are you looking to change fund / switch to ETFs? Why don't you just switch from the Total Stock Market to the S&P 500 index tomorrow, and then switch back on Wednesday?

livesoft
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Re: What are the trading restrictions on Vanguard ETFs?

Post by livesoft » Mon Nov 02, 2015 7:51 pm

Daryl wrote:livesoft - Could you share more about the the "free trades" from your TD Ameritrade rep? Could this be tied to your account size with the firm? I just opened an account with them a couple months ago. I was thinking about just sticking with the Total Bond Market EFT (BND), which is on their "commission free list", but might look at other Vanguard Bond ETFs if the price was right :)
What's to share? Everything is negotiable, so if you don't negotiate, you don't get. OTOH, the no-commission list is substantial and there is very little need to ever a pay a commission at TDAmeritrade. After all, one shouldn't be day trading with ETFs anyways.
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Epsilon Delta
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Re: What are the trading restrictions on Vanguard ETFs?

Post by Epsilon Delta » Mon Nov 02, 2015 7:52 pm

Daryl wrote:
Kix wrote:This makes me wonder if I can tax gain harvest out of VTSMX into VTI. Hm, anyone know?
These are different classes of the same fund. This would almost certainly trigger a wash sale.
The wash sale rule only applies to sales at a loss. You can tax gain harvest from VTSMX to VTSMX as far as the IRS is concerned (Not sure if Vanguards platform will allow it as a single transaction)

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Re: What are the trading restrictions on Vanguard ETFs?

Post by Daryl » Mon Nov 02, 2015 8:02 pm

While I understand that "everything is negotiable", total account size might provide some leverage in those negotiations! I have a rather high fixed income allocation (given my age), so I've been thinking about balancing the Total Bond Market Index Fund with some Short/Intermediate term Corporates (Investment Grade). I'll be attending a short seminar at my local office later this week so I'll see what my rep can do to help out!

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Re: What are the trading restrictions on Vanguard ETFs?

Post by Kix » Tue Nov 03, 2015 7:39 pm

Daryl wrote:
Kix wrote:This makes me wonder if I can tax gain harvest out of VTSMX into VTI. Hm, anyone know?
These are different classes of the same fund. This would almost certainly trigger a wash sale.

Edit to add - If you are trying to harvest gains, why are you looking to change fund / switch to ETFs? Why don't you just switch from the Total Stock Market to the S&P 500 index tomorrow, and then switch back on Wednesday?
Yes, I was only thinking of harvesting gains within my 15% tax bracket, so I'm not concerned about the wash sale.

As to why not switch from S&P 500 back to VTSMX on Wednesday, the last time I sold a vanguard fund (it was VFINX, the S&P 500 fund) they told me I had to wait 60 days to buy back into the same fund. I assumed (wrongly maybe) that this would apply to VTSMX as well, once I sell they would prohibit me from buying it again for 60 days.

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Re: What are the trading restrictions on Vanguard ETFs?

Post by small_index » Tue Nov 03, 2015 9:48 pm

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Re: What are the trading restrictions on Vanguard ETFs?

Post by JDDS » Wed Nov 04, 2015 8:58 am

HenryPorter wrote:
livesoft wrote: I cannot imagine that Vanguard would "cut you off". I can see where they would charge a commission though. I see where Vanguard writes "you may …", so that word "may" gives them a lot of leeway.
Yes, the footnote reads:

"If you buy and sell the same Vanguard ETF in a Vanguard Brokerage Account more than 25 times in a 12-month period, you may be restricted from purchasing that Vanguard ETF through your Vanguard Brokerage Account for 60 days."

So, not a certainty of being barred from trading the ETF for 60 days, but they leave the possibility of it.

Note that they won't bar trading in both directions. They may restrict you from buying it, but it says nothing about selling.

rakamaka
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Re: What are the trading restrictions on Vanguard ETFs?

Post by rakamaka » Wed Nov 04, 2015 9:07 am

ETFs: Don't bother with Vanguard, TD or Fidelity
got to Schwab. 175 ETFs, no fees , NO RESTRICTIONS
Can't beat that deal !!

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Re: What are the trading restrictions on Vanguard ETFs?

Post by JDDS » Wed Nov 04, 2015 9:08 am

Kix wrote:
Daryl wrote:
Kix wrote:This makes me wonder if I can tax gain harvest out of VTSMX into VTI. Hm, anyone know?
These are different classes of the same fund. This would almost certainly trigger a wash sale.

Edit to add - If you are trying to harvest gains, why are you looking to change fund / switch to ETFs? Why don't you just switch from the Total Stock Market to the S&P 500 index tomorrow, and then switch back on Wednesday?
Yes, I was only thinking of harvesting gains within my 15% tax bracket, so I'm not concerned about the wash sale.

As to why not switch from S&P 500 back to VTSMX on Wednesday, the last time I sold a vanguard fund (it was VFINX, the S&P 500 fund) they told me I had to wait 60 days to buy back into the same fund. I assumed (wrongly maybe) that this would apply to VTSMX as well, once I sell they would prohibit me from buying it again for 60 days.
Vanguard lowered the time in most circumstances from 60 to 30 days. There's also a few other workarounds. There's more info on the wiki page: https://www.bogleheads.org/wiki/Frequent_trading_policy

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Re: What are the trading restrictions on Vanguard ETFs?

Post by livesoft » Wed Nov 04, 2015 9:50 am

rakamaka wrote:ETFs: Don't bother with Vanguard, TD or Fidelity
got to Schwab. 175 ETFs, no fees , NO RESTRICTIONS
Can't beat that deal !!
WellsTrade beats the deal for many folks: No commissions on any ETF or stock or mutual fund. :)
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rakamaka
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Re: What are the trading restrictions on Vanguard ETFs?

Post by rakamaka » Wed Nov 04, 2015 10:03 am

livesoft wrote:
rakamaka wrote:ETFs: Don't bother with Vanguard, TD or Fidelity
got to Schwab. 175 ETFs, no fees , NO RESTRICTIONS
Can't beat that deal !!
WellsTrade beats the deal for many folks: No commissions on any ETF or stock or mutual fund. :)
Where does it says no comissions??? Please direct me on their fees page..
Minimum 'idle' balance for Wellstrade? 25,000 $ That earns only 0,05% ??
PMA package is not as cheap as it sounds even when combined with brokerage.
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livesoft
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Re: What are the trading restrictions on Vanguard ETFs?

Post by livesoft » Wed Nov 04, 2015 10:05 am

rakamaka wrote:
livesoft wrote:
rakamaka wrote:ETFs: Don't bother with Vanguard, TD or Fidelity
got to Schwab. 175 ETFs, no fees , NO RESTRICTIONS
Can't beat that deal !!
WellsTrade beats the deal for many folks: No commissions on any ETF or stock or mutual fund. :)
Minimum 'idle' balance for Wellstrade? That earns only 0,05% ??
For me at WellsTrade, it is $0.00.
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Re: What are the trading restrictions on Vanguard ETFs? [Brokerage service]

Post by LadyGeek » Wed Nov 04, 2015 5:16 pm

This thread is now in the Investing - Theory, News & General forum (general question). I also retitled the thread to clarify that the question is regarding Vanguard Brokerage Services.
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Re: What are the trading restrictions on Vanguard ETFs?

Post by livesoft » Wed Nov 04, 2015 7:11 pm

rakamaka wrote:
livesoft wrote:
rakamaka wrote:ETFs: Don't bother with Vanguard, TD or Fidelity
got to Schwab. 175 ETFs, no fees , NO RESTRICTIONS
Can't beat that deal !!
WellsTrade beats the deal for many folks: No commissions on any ETF or stock or mutual fund. :)
Where does it says no comissions??? Please direct me on their fees page...
I missed your question in my previous answer. Here is what it tells me in the order submission window:
Image

It appears I've made one single trade in this account since 2/10/2015 and it was a free trade. I have lots more free trades to go.

(OK, full disclosure: I am grandfathered into the WellsTrade 100-free trades per account deal. But everything is negotiable. I did some negotiating today with another broker and got more free trades.)
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