Wanted to get some feedback on having a cash account versus a margin account. My current broker is ThinkOrSwim FYI. Maybe this will be useful for other newbies as well :)
I understand that the PDT rule ONLY applies to margin accounts with your broker and that having a cash account means that you're not able to short stocks (TOS is not great for borrows). However, the benefit of having a margin account means no waiting period for funds to settle and can hold as many stocks as you want o/n with no hits against your PDT rule count. Whereas with a cash account you cannot use your funds until they've settled and that can take days...Example, you have a $3k account and make two $1500 trades back to back means you can't trade AT ALL until those funds settle.
I originally opened my account as a margin account but when I realized that you can't short OTC's and that most of the stocks you can easily borrow are +$10-$15 (with TOS), I decided to switch to a cash account. I am realizing that having the ability to even short one stock that comes on the radar is potentially worth it as opposed to having to wait for funds to settle and not being able to short at all.
What are you guys' thoughts on this? Thank you!