Joe_Wall_Street
Joe_Wall_Street May 23, 16 2:30 AM

The key to trading with Cash accounts is to only trade with settled funds. If you have $10,000 in your account and you perform three days trades on Monday then you'll have to wait for those funds to settle 3 days later before you can trade with them again. I converted one of my TD Ameritrade margin accounts to a Cash account and day trade options every week and do more than three day trades and never got flagged.

Joe_Wall_Street
Joe_Wall_Street May 23, 16 2:45 AM

Also, the way I understood it back when I was with Scottrade, if you have a Cash account with $10,000 in it and you use $5,000 to to day trade on Monday, those funds won't settle until 3 days later, which is Thursday. You can still trade before Thursday but can only do so using the remaining $5,000. If you day trade with the remaining $5,000 on Tuesday then those funds won't settle until Friday.

Joe_Wall_Street
Joe_Wall_Street May 23, 16 2:48 AM

Where I think things can get a little ugly with Cash accounts is that the 3 day settlement period applies to both day trades and swing trades. Even if you hold your positions overnight and sell them the next day you still have to deal with the 3 day settlement period whereas you don't have those types of restrictions when swing trading with margin accounts.

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