My understanding is that if you purchase another stock with the proceeds from the sale of stock then you can not sell that new stock until the 3 days settlement date of the sale expires since you bought the new stock with funds that you actually did not really have yet. if there is a violation then you can be penalized for a few months and not be able to purchase stocks until all funds / proceeds are first cleared and settled. i think the above is correct.
I have a novice question..
What is it called when you sell a stock and before the 3 days for the sale is clear passes you buy another stock, with the money you will be getting from the sale?
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