amount that can be traded in 3 days

[johnlvs2run]

How much can be traded each week with an IRA account of, for example, 100k?
Two brokers gave me different answers about this.

Ameritrade said only cash principal can be traded within 3 days, while waiting for settlement, and that IRA's can not have margin accounts.
ThinkorSwim said all their accounts have margin privileges but that I could switch to a cash account with no margin privileges.

1. How much can be traded each 3 days if the IRA has to be a cash account?
2. Or how much if it can be a margin account?
3. Which broker is correct?

Thanks.

 

[Rhody Trader]

I think there's some confusion in the question/answers here. Are you asking how many trades and/or how much $$ volume can be traded over the course of three trading days?

 

[johnlvs2run]

I think there's some confusion in the question/answers here. Are you asking how many trades and/or how much $$ volume can be traded over the course of three trading days?

How much $$ volume.

The reason I'm asking how many trades is because I don't know if that makes a difference, or if it's only the dollar volume that matters.

 

[Rhody Trader]

The reason I asked for clarification is because your broker answers seem not to be really getting to your question at all. In theory you can trade as many times and as much volume as you want, constrained by the amount of capital and/or margin credit you have available to you and how much the market you are trading can tolerate. Brokers won't cut you off at a certain number of trade so long as you have the means to do the trading. After all, they get paid on the transaction flow. The one consideration you may have to deal with, however, is the pattern day trader thing.

 

[fantastic4]

Differnet brokers have different rules. The cash/margin rules would apply to any account. If you've a cash account then you have to wait for the money to clear before you can use it again. Maybe Ameritrade doesn't allow IRAs to have margin. Day trading rules apply to margin account, not to cash, but that's because in a cash you have to wait for the money to clear anyway.

If you really need clarification, ask to speak to a manager, or just use their online chat feature, ask a few different people and see if you get the same answer. Customer service at most brokerages is awful. Unless, you've sent them a check, they're incredibly expedient at that point.

 

[johnlvs2run]

It turns out the information from Ameritrade was correct.

An IRA does not allow borrowing money to purchase stock or any other security.

Also, there is no shorting of stocks.

 

[luckyd1976]

www.irs.gov
Pub 590 on IRA(s)
pg. 48


"Prohibited Transactions

Borrowing Money from it.
Selling Property to it.
Receiving unreasonable compensation for managing it.
Using it as security for a loan.
Buying property for personal use (present of future) with IRA funds."