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

[jono1887]

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.

You could... but comsec has a limit of 25k with no money in the account, more than that and you will need collateral or something like that..

 

[titus]

OK, so if I've got this right the following will happen in a normal working week:
If I buy $20K of XYZ shares on Monday (forget about the selling part), Commsec are scheduled to take the funds out of my account on Thursday (T+3) which in reality means that I have to have at least 20K in my account by COB Thursday (when all the previous day's transactions are processed overnight i.e. midnight Friday). Or does the money have to be in my account by COB Wednesday?

 

[bryan_palmer]

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.

What happens in the same scenario, but I sell the day after I buy instead? Do the 2 trades still cancel each other out and I don't have to fork out my own money?

 

[milothedog]

If you sell the day after your initial purchase for a profit, that sell trade effectively becomes T+3, eg your profits are deposited 3 days after your sell.

If you sell the day after your initial purchase for a loss, that trade (the loss component, including trade costs) has to be covered from the T+3 initial buy.

Best not to trade without covering capital, or be VERY disciplined about taking losses with the capital you do have.

Trading Halts are different to the 10 minute halts for Pre Open notices Zaij ...Trading halts can go on ..... and on .... and on .... too many instances to bother mentioning (blames the GFC )

 

[bryan_palmer]

If you sell the day after your initial purchase for a profit, that sell trade effectively becomes T+3, eg your profits are deposited 3 days after your sell.

If you sell the day after your initial purchase for a loss, that trade (the loss component, including trade costs) has to be covered from the T+3 initial buy.

Best not to trade without covering capital, or be VERY disciplined about taking losses with the capital you do have.

Trading Halts are different to the 10 minute halts for Pre Open notices Zaij ...Trading halts can go on ..... and on .... and on .... too many instances to bother mentioning (blames the GFC )

How about sell 2 days after the buy for profit?

 

[milothedog]

LOL...selling 2 days later for profit, you have to cover the entire amount of the trade in T+3, then your sell will return capital and profit (minus trading costs) in T+3 from sell date

 

[drsmith]

With Westpac it is possible, for example, to buy say $10000 worth of stock one day, sell, say $15000 worth of stock the next with the only transaction going through the account being a credit of $5000 at T+3 after the sell.

The arrangements are a little complex and it does depend on settlement method (BPAY is different to Driect Debit) so the following document is essential reading in relation to the above.

https://www.westpac.com.au/manage/pdf.nsf/855920A3EB1F8A4FCA25730000167B01/$File/Trading_Guide.pdf?OpenElement

 

[titus]

OK, so if I've got this right the following will happen in a normal working week:
If I buy $20K of XYZ shares on Monday (forget about the selling part), Commsec are scheduled to take the funds out of my account on Thursday (T+3) which in reality means that I have to have at least 20K in my account by COB Thursday (when all the previous day's transactions are processed overnight i.e. midnight Friday). Or does the money have to be in my account by COB Wednesday?

OK, I'll answer my own question. If given the scenario above, T+3 is Thursday. Commsec deducts the amount from my account on Thurs night i.e. the first night after the close of T+3, not ON or DURING T+3.

 

[milothedog]

Yes titus....money will be deducted overnight on the Thursday and will need to be covered by then.

 

[Dilati]

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!

yeah but wats the chances of having the stock to halt, and he really doesnt have to come up with 21280 all he needs 2 do after the halt is sell the shares and pay 50 dollars on every single day after T+3, however he needs to keep in mind commsec wouldnt let you trade over 25k with no collateral,
and all you need 2 now about T + 3 is jst the settlement day they use 2 get confused before about settlements so they intreduced this policy to avoid any confusion.

 

[nunthewiser]

unreal