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Old 01-21-2016, 01:49 PM   #21
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Originally Posted by jim584672 View Post
Just sold the shares, no warnings. I think the warning from yesterday was bogus and the CSR was incompetent.
I'm curious, what did you mean by "the funds to pay for it are in the settlement account."? That might be key? If a different account, they might not 'show up' in your trading account until after the close? This might have something to do with what I've been reading about Vanguard consolidating brokerage accounts with other accounts at Vanguard?

In an IRA, and a non-margin account, you aren't supposed to be allowed to sell something you bought with funds that were not settled in the account, until they are settled. I got that warning just the other day from E*Trade in my IRA (been doing a little short term playing with options lately).



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Originally Posted by Travelwanted View Post
Jim, i generally really like Vanguard, but not for doing relatively quick trades.

A couple years ago I was doing very well with small amounts of money buying and selling stocks, often in the same day. Don't worry, this was a very small portion of my portfolio. ...
I don't know if this applies in your case, but I don't think it is the size of the trade that matters, or % of portfolio, it is simply a matter of whether the purchase was made with unsettled funds. I'd guess that even a single $ unsettled out of a $100,000 purchase would trigger their computer to give that warning.

If other brokerages are not doing this, it seems to me they are in violation of SEC rules (not applicable if you have a margin account)?

-ERD50
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Old 01-21-2016, 02:06 PM   #22
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Originally Posted by ERD50 View Post
I'm curious, what did you mean by "the funds to pay for it are in the settlement account."? That might be key? If a different account, they might not 'show up' in your trading account until after the close? This might have something to do with what I've been reading about Vanguard consolidating brokerage accounts with other accounts at Vanguard?

In an IRA, and a non-margin account, you aren't supposed to be allowed to sell something you bought with funds that were not settled in the account, until they are settled. I got that warning just the other day from E*Trade in my IRA (been doing a little short term playing with options lately).

-ERD50
It is the sweep account. I have been in "cash" not waiting on any trades to settle. They use the term "settlement account".
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Old 01-21-2016, 02:38 PM   #23
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It is the sweep account. I have been in "cash" not waiting on any trades to settle. They use the term "settlement account".
OK, but I still think there is a difference between the funds showing up on your balance, and being 'settled' (available to use to purchase w/o restriction).

Example (assume non-margin account):

I have $300 cash balance in the account. I sell $1,000 worth of stock ABC. IME, as soon as I sell, my account shows a cash balance of $1,300. But that $1,000 is not 'settled' for three days.

So if I buy over $300 worth of another stock, I will be told that I cannot sell that stock until the funds from the sale of stock ABC settle.

That is my understanding. That is why I was a little surprised when the warning popped up for me, I knew I had the cash there, but alas, it was not settled cash.

Does that fit your situation? Although - I got the warning when I made the purchase (and maybe not until just after, but I'm not sure now). It would be best if it came up before it let you complete the purchase, I think mine did, but I think I hit submit rather than 'back' to check! But it worked out OK for me. Well, actually, it worked out badly, but not due to the restriction

I'll watch more closely if this comes up again. I know my balance sheet will also show 'available for purchase', and that excludes cash that is reserved against a put sale for example. But I don't think they exclude unsettled funds, as they are available for purchase, but then there are restrictions once you make the purchase. Maybe 'available', and 'available w/o settlement restriction' would be more helpful?

-ERD50
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