# Is it possible to buy and sell a stock on the same day?



## talabala (Aug 6, 2011)

Hello, my question is it possible to buy and sell stock on the same day using online trading account with any bank? I have an account with CIBC. Will the bank allow me to sell the stock on the same day when the buy transaction is not fully completed? I hope my question makes sense 
thank you!


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## DrMatt (Dec 11, 2011)

talabala said:


> Hello, my question is it possible to buy and sell stock on the same day using online trading account with any bank? I have an account with CIBC. Will the bank allow me to sell the stock on the same day when the buy transaction is not fully completed? I hope my question makes sense
> thank you!


Sure you can. No problem. (I use scotiaitrade).


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## mind_business (Sep 24, 2011)

The answer is no ... but that's partly because I think you're not asking the question correctly. The buy transaction must be completed before you can sell a stock. Once the buy transaction is complete, you can sell the stock immediately if you so wish.

I think what you're asking is, can you sell a stock that you just purchased, but doesn't show up that day in your Online account portfolio of stocks that you own. I can only speak about RBC Direct Investing since that's all I've ever used. When purchasing a stock, it won't show up in your account portfolio of stocks until the next day ... but trust me, the second it shows that the status of your transaction as 'bought', the transaction has been completed. Just make sure you've got cash in the account to pay for the trading fees.


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## DrMatt (Dec 11, 2011)

Not true... With etrade I've bought and sold on the same day... for profit... Didn't have to wait until I officially 'owned' the shares. If this was only due to margin I'd be surprised. It was HOU that I was trading.


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## mind_business (Sep 24, 2011)

DrMatt said:


> Not true... With etrade I've bought and sold on the same day... for profit... Didn't have to wait until I officially 'owned' the shares. If this was only due to margin I'd be surprised. It was HOU that I was trading.


re-read my post. We're saying the same thing.


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## DrMatt (Dec 11, 2011)

mind_business said:


> re-read my post. We're saying the same thing.


My bad.


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## newbie (Dec 12, 2009)

talabala said:


> Hello, my question is it possible to buy and sell stock on the same day using online trading account with any bank? I have an account with CIBC. Will the bank allow me to sell the stock on the same day when the buy transaction is not fully completed? I hope my question makes sense
> thank you!


the answer to ur question without hesitation if u have the funds plus appropriate fees is 100% yes.
CIBC entitles u to make as many trades in same stock intraday , and also when u sell intraday , for the same price.
if u have 50k in assets $9.95 , if u have 100k $6.95
TD /BMO /RBc are different and they charge per trade.
dunno bout questrade
with 100 k u get level 2 far free


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## talabala (Aug 6, 2011)

Thank you everybody for the answers!


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## Toronto.gal (Jan 8, 2010)

That is why is called day-trading. 

Note however, that if you sell, you can't withdraw the money from the account until after the settlement date [3 days].

Welcome to CMF talabala!


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## talabala (Aug 6, 2011)

Thank you!


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## newbie (Dec 12, 2009)

Toronto.gal said:


> That is why is called day-trading.
> 
> Note however, that if you sell, you can't withdraw the money from the account until after the settlement date [3 days].
> 
> Welcome to CMF talabala!


ha
sorry i forgot the settlement 3 days
good work Tgal


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## Synergy (Mar 18, 2013)

Toronto.gal said:


> That is why is called day-trading.
> 
> Note however, that if you sell, you can't withdraw the money from the account until after the settlement date [3 days].
> 
> Welcome to CMF talabala!


What if you use TDB8150 (T+1) to cover the purchase. Can you buy and sell on the same day? Would this not be considered "free riding" if you don't wait 1 day before proceeding with the sale?


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## Eclectic12 (Oct 20, 2010)

^^^

For my broker at least (TDDI), the accounts will treat TDB8150 as being cash. 

For example, I've bought in an RRSP account where the cash only covered half of what was needed. I bought the stock and when the buy was shown as filled, I then put in the sell order for TDB8150 to cover the rest.

Where the stock is being bought/sold in the same day - TDB8150 can be used to cover the buy .... but I suspect the answer is the same for withdrawing cash.

Selling TDB8150 should have a shorter time frame before the cash is available as it is T+1 instead of the stock T+3.


I'm not sure if this is what you are asking though ...


Cheers


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## MrMatt (Dec 21, 2011)

You should be able to trade as soon as the order is filled. When the order is filled, you've effectively traded the stock for the money.
At this point many people consider the trade "done".

However the cash doesn't move until the settlement date. That is when they actually move the money and finalize the transaction.
Until the trade is settled, it isn't really complete, eg you don't actually have the money yet.


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## Synergy (Mar 18, 2013)

MrMatt said:


> You should be able to trade as soon as the order is filled. When the order is filled, you've effectively traded the stock for the money.
> At this point many people consider the trade "done".


TDB8150 trades like a MF so it's not filled until after the close. So I guess I'd be SOL unless I had the money sitting in the trading account. If I get the chance today I'll try to call TD to see their take on this.

*Eletric12*, I'm at TD as well. I was hoping to have the ability to purchase stock ABC (on one day), Sell TDB8150 (same day) to cover the purchase, and Sell stock ABC (same day). Considering TDB8150 is not filled until after the close I'm assuming this transaction would be viewed as a form of free riding "good faith". This is not something I plan on doing often - ie day trading, but I just wanted to know how things would play out should I want to sell a stock on the same day as the purchase.

Thanks for the responses.


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## Eclectic12 (Oct 20, 2010)

^^^^

Okay ... now I understand what you mean. The fact that the TDB8150 doesn't get reported as closed does not matter as the computers know that cash is coming, despite the reporting lag.

Don't forget - the stock buy is going to settle in T+3 whereas the TDB8150 settles in T+1. So regardless of what's reported and when the TDB8150 is officially reported as completed, the cash proceeds will be credited to the account before the stock buy money is due.

For example, I have bought a stock on Tuesday then put in the TDB8150 sell on Wednesday where everything worked out fine.


That said ... if you are going to sell same day, unless the gain is too small to cover the cost plus the buy/sell commissions, why are you messing around with TDB8150 at all?

If one buys this morning and sells this afternoon - both transactions will settle *on the same day*. I haven't done this ... but other posts I've seen say this works just fine.


Cheers

*PS*

One of the reasons I am confident the buy/sell on same day should work is that what I have done in various accounts is to buy stock A in the morning and over the rest of the day, sell enough of stock B and stock C to cover the total cost for stock A. This worked just fine.


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## Synergy (Mar 18, 2013)

Eclectic12 said:


> *PS*
> 
> One of the reasons I am confident the buy/sell on same day should work is that what I have done in various accounts is to buy stock A in the morning and over the rest of the day, sell enough of stock B and stock C to cover the total cost for stock A. This worked just fine.


Same, I've done the above as well. Both trades will settle on T+3. I'm going to try TD later today to get some clarification. I don't plan on doing this, I just wanted to know how it would work in case it ever happened.


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## Synergy (Mar 18, 2013)

Buy & Sell the same stock in the same day using TDB8150. So according to a TDDI representative, as long I as have enough funds inside the TDB8150 I don't even have to sell any of the TDB8150 as long as the proceeds of the sale cover the costs. It's only considered "free riding" if your purchase is greater than the amount of cash you have sitting inside TDB8150. The rep was very helpful - discussed the 2x equity rule, using a margin account as a option, etc.

Now if only TDB8150 would pay us a better rate!


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> ... Now if only TDB8150 would pay us a better rate!


It depends on what you compare with ... TDB8150 seems much better than TDB8152, which is paying 0.20%. :biggrin:


Cheers


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## Synergy (Mar 18, 2013)

Eclectic12 said:


> It depends on what you compare with ... TDB8150 seems much better than TDB8152, which is paying 0.20%. :biggrin:
> Cheers


True, could be worse, could be better.


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> Buy & Sell the same stock in the same day using TDB8150.
> 
> So according to a TDDI representative, as long I as have enough funds inside the TDB8150 I don't even have to sell any of the TDB8150 as long as the proceeds of the sale cover the costs. It's only considered "free riding" if your purchase is greater than the amount of cash you have sitting inside TDB8150...


Pretty much as I thought ... the only question in my mind is why TDB8150 (or cash) would matter in a taxable account.

I can see that in a registered account, there might not be the ability to add more cash due to maxing out contribution limits. So I can understand needing cash/cash like assets such as TDB8150 to buy.

In a taxable account, I can have zero cash/cash like assets and not enough stock to cover the purchase but I can still buy. So unless there is something preventing a sale (which I doubt) - it won't matter until the bill comes due on T+3.


Cheers


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## Synergy (Mar 18, 2013)

Eclectic12 said:


> Pretty much as I thought ... the only question in my mind is why TDB8150 (or cash) would matter in a taxable account.
> 
> I can see that in a registered account, there might not be the ability to add more cash due to maxing out contribution limits. So I can understand needing cash/cash like assets such as TDB8150 to buy.
> 
> ...


According to TD, you can buy up to 2 times the equity in your account without having the actual cash or TDB8150 available. It's up to the investor to ensure its available in time for the settlement. For some reason if you buy and sell on the same day without the cash or TDB8150 they consider this free riding. There's nothing from stopping you from doing it, your account could however be flagged and trading halted if the activity continued. At least that's how it was explained to me.


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## Synergy (Mar 18, 2013)

jacofan said:


> you can buy, then sell the same day BUT then you can't rebuy before the sell trade settles. If you rebuy before the sell trade has settled THEN it's considered free riding and TD will suspend your account --- unless you have margin to cover.


Yes, as was explained in my previous post. However, one must have enought "cash" to cover the trade when you buy and sell on the same day or it will be considered "free riding", according to TDDI.

Here's a quote from CIBC investor's Edge



> Free-riding / Flipping Rule: Free-riding / flipping occurs when a client *does not pay for a security he/she has purchased before selling the same security*. When a client free-rides they are trading on the firm's capital, a practice that is strictly prohibited by the IIROC. Our credit department monitors free-riding and notes the practice on the client's account. If this is identified, trading privileges may be suspended or limited to cash up front for every trade on the account.


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> According to TD, you can buy up to 2 times the equity in your account without having the actual cash or TDB8150 available. It's up to the investor to ensure its available in time for the settlement.


Interesting ... since I'm at the shortest, week trading and most of my purchases are long term, the equity is usually climbing. 




Synergy said:


> For some reason if you buy and sell on the same day without the cash or TDB8150 they consider this free riding. There's nothing from stopping you from doing it, your account could however be flagged and trading halted if the activity continued. At least that's how it was explained to me.


It's probably been identified as a risk because if one is funding the buy from the sale - there's lots of room for the buy/sell to end up in a loss position, where the investor may or may not be prepared to pay from other sources.

I also suspect that the amounts involved will affect the flagging. 


Thanks for your effort and letting us know the results of your enquiry.


Cheers


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## Synergy (Mar 18, 2013)

Eclectic12 said:


> I also suspect that the amounts involved will affect the flagging.
> Cheers


The rep mentioned that if you're over a little bit that it won't be a problem.


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