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JustStartingOut

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JustStartingOut

Re: LetsRoll9696 post# 116974

Friday, 03/14/2014 11:00:02 AM

Friday, March 14, 2014 11:00:02 AM

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yes, you can... however you watch out for the FREE RIDING RULE...

Purchase Stock A on Monday
Sell Stock A on Tuesday & Buy stock B... you CANNOT SELL STOCK B for at least 3 days... if you do, you are freeriding and can get into trouble...

The Securities and Exchange Commission states "In a cash account, you must pay for the purchase of a stock before you can sell it. If you buy and sell a stock before paying for it, you are free riding, which violates the credit extension provisions of the Federal Reserve Board. If you free ride, your broker must freeze your account for 90 days."



http://en.wikipedia.org/wiki/Free_riding

This is how I understand it anyway (IMO)

JustStartingOut

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