Confused about day trading: can I sell before T+3?

fzbkk · 27 August 2009

I am confused about the t+3 rule when buying stocks and selling. If I wanted to day trade, buy and sell a stock the same day what about the t+3 rule? My understanding is I don't yet own the stock so how can I sell it? I am interested in going long not short, if that helps.

Timmy · 27 August 2009

Re: confused about day trading, can i sell before t+3

Yes you can day trade. Buy and sell the same stock on the same day, no problem.

jono1887 · 27 August 2009

you may not be holding them, but you also have to remember that selling goes by T+3 as well, so your not selling them on the day, but in 3 days time...

fzbkk · 27 August 2009

jono1887 said:
you may not be holding them, but you also have to remember that selling goes by T+3 as well, so your not selling them on the day, but in 3 days time...

Two posts and two conflicting reply's one is yes you can sell the same day the other is no your selling them in 3 days time. I am still confused.

**edit** OK i was quick to post that reply, just woke up and and logged on. After reading the last post again I think I get it.

fzbkk · 27 August 2009

Correct me if I am wrong, you could buy say 2000 AMP shares @10.64 $21280.00 and not actually have the funds in your bank account to cover it. Then later in the day sell them for say 10.78 $21560.00. Three days later Commsec credit your account with the profit of $280.00. Obviously if you sell at a loss they debit your account with the difference.

Real1ty · 27 August 2009

fzbkk said:
Correct me if I am wrong, you could buy say 2000 AMP shares @10.64 $21280.00 and not actually have the funds in your bank account to cover it. Then later in the day sell them for say 10.78 $21560.00. Three days later Commsec credit your account with the profit of $280.00. Obviously if you sell at a loss they debit your account with the difference.

That is correct BUT if you suffer a loss you need to have the funds to cover the loss in your account before midnight on settlement date, or you will receive penalties each day until you do.

Knobby22 · 27 August 2009

Also, Comsec will probably not let you do it as you haven't got the cash in your account.

tech/a · 27 August 2009

Of course you can.
I buy and sell the same stock up to 3x a day in some cases.

Krusty the Klown · 27 August 2009

Usually, you should have an "available funds to trade" amount in your account. This is the limit of what you can trade. If your trade size is bigger than this amount the trade will be rejected.

Mind you, I have not used every broker, so some may be different.

Effectively you legally own the shares the time the trade is executed and can sell one minute later. T3 is the deadline for when the funds are exchanged between banks.

If you sell one minute later, your account is usually credited with the sale amount and added to your "available to trade" amount, allowing you to trade again, as the exchange of funds is guaranteed by the ASX.

beamstas · 27 August 2009

fzbkk said:
Correct me if I am wrong, you could buy say 2000 AMP shares @10.64 $21280.00 and not actually have the funds in your bank account to cover it. Then later in the day sell them for say 10.78 $21560.00. Three days later Commsec credit your account with the profit of $280.00. Obviously if you sell at a loss they debit your account with the difference.

Yes
And when they go into a trading halt you're going to have to come up with $21280, so it's not really a good idea to trade with money you don't have!

LostInTransit · 27 August 2009

fzbkk said:
Correct me if I am wrong, you could buy say 2000 AMP shares @10.64 $21280.00 and not actually have the funds in your bank account to cover it. Then later in the day sell them for say 10.78 $21560.00. Three days later Commsec credit your account with the profit of $280.00. Obviously if you sell at a loss they debit your account with the difference.

Can I get in here and ask a quick question..well I am anyway.

Since I am still strugling with this idea, can you please clarify when you say "Three days later Commsec credit your account with the profit of $280.00. Obviously if you sell at a loss they debit your account with the difference."

I am more interested in if you sell at a loss. What amount they will debit? So If the loss is $280 they will only deduct $280? or

shares I buy @10.64 $21280.00 (assuming I have no money in the by bank account to trade)

Sell on the same day $21000 at a loss total at $280 + brokerage
And the Trading firm deducts from my account (provided I have $280+29 in the account) $280 + 29 brokerage?

That's crazy.

Timmy · 27 August 2009

LostInTransit said:
That's crazy.

Hi Lost....

Question from an old person here ...

When you say "That's crazy", do you mean the process meets with your approval, or it does not? (Not really up on the lingo sorry).

LostInTransit · 27 August 2009

Yes it even exceeds but only if someone confirms that is the case.

For example, I can not believe you can buy stock worth $21280.00 not having a penny and sell on the same day.
Keep the total profit if stocks go up less brokerage..OR

Pay only back the difference (loss amount = $280 plus brokage) when socks go down . Assuming $280 is the total loss for the day. Naturally on the second day if the loss greater I would pay more of the loss back to comsec ..

I am not sure If I am correct in saying all this that is why I need confirmation.

Am I clear or not?

Real1ty · 27 August 2009

LostInTransit said:
Yes it even exceeds but only if someone confirms that is the case.

For example, I can not believe you can buy stock worth $21280.00 not having a penny and sell on the same day.
Keep the total profit if stocks go up less brokerage..OR

Pay only back the difference (loss amount = $280 plus brokage) when socks go down . Assuming $280 is the total loss for the day. Naturally on the second day if the loss greater I would pay more of the loss back to comsec ..

I am not sure If I am correct in saying all this that is why I need confirmation.

Am I clear or not?

Yes that is correct but of course as beamstas has pointed out, you can have your socks : pulled down if the stock goes into a trading halt for example

I don't know how Commsec work now and they might have tightened up their rules for new clients but i have had an account with them for many many years and have never had to have funds in the account prior to executing a trade. Of course i have a massive trading history with them, so maybe i have allowances made to me that newer traders do not.

It might be best to read ALL their info provided and if still in doubt call them.

LostInTransit · 27 August 2009

Pardon my ignorance but what is 'trading halt' ?

In regards to Comsecc, they give you T3 in which time you can buy and sell but I am too scared to experiment. So I have always put up my money upfront todate.

Zaij · 27 August 2009

A trading halt is when the shares can not be traded for a time; usually for 10 minutes after the release of a price sensitive announcement.

As for t+3, you can usually buy without having the money in your account provided there is some money in your account on the day of the settlement;

That is, buy on t+0 with no money in your account, put money in your account on t+2 and on t+3 you get the shares, and the money leaves your account.

Cartman · 27 August 2009

LostInTransit said:
Pardon my ignorance but what is 'trading halt' ?

In regards to Comsecc, they give you T3 in which time you can buy and sell but I am too scared to experiment.

LinT ---- do yourself a favor and stay scared

take heed at what was mentioned above by the boyz ---- AND do some research into what an extended trading halt can do to a leveraged account (ie U r trading with money u dont have) ---- especially if the trading halt is bad news and your stock drops 50% overnight !!

geez that just bought back some bad memories lol --- aint experience a wonderful thing

cuttlefish · 27 August 2009

Zaij said:
A trading halt is when the shares can not be traded for a time; usually for 10 minutes after the release of a price sensitive announcement.

But also sometimes trading halts go for days and occasionally they are followed by a temporary or permanent suspension. This means you may get in a situation where you buy stock, but can't sell it on the same day and thus unless you put enough cash to cover the trade in your account in time then you will fail to settle on T+3.

Zaij · 27 August 2009

Yeah, there's been some dodginess about TZL, I think they're being investigated by ASX or something. It hasn't traded for about a month, so if you bought right before the trading halt expecting to sell it shortly afterwards, you'd be out of luck

LostInTransit · 27 August 2009

Zaij said:
A trading halt is when the shares can not be traded for a time; usually for 10 minutes after the release of a price sensitive announcement.

As for t+3, you can usually buy without having the money in your account provided there is some money in your account on the day of the settlement;

That is, buy on t+0 with no money in your account, put money in your account on t+2 and on t+3 you get the shares, and the money leaves your account.

Many Thanks for your explanation Zaij and beamstas. Same goes for the Cartman (lol) . good answer .

Thanks guys

Confused about day trading: can I sell before T+3?

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