Why does ZECCO make you wait 3 days after a trade to get the buying power back or more after selling a stock?

Question

Basically If I buy some stock and then sell it I have to wait 3 days before I get the cash balance in my account. Why does this take so long? Are there ANY brokerages that give you the buying power immediately??????

Answer 1

All broker/dealers maintain their books and records a settlement bases

ALL trades SETTLE on the settlement date, the settlement date is three business days follow the trade date.

This is a federal law and ALL broker/dealers follow this law at all times.

Even if you have a margin account ALL trades settle on the settlement date, not the trade date (although margin is calculated on trade date)

Unless a trade is done for cash, it will settle on settlement date,

The reason it "takes so long" it's federal law and this pratice has been in effect since the buttonwood tree.

Answer 2

Stocks are T+3 and mutual funds are T+1.  That means Trade + 3 days for stocks.  That's the settlement period.  But most brokerages will let you buy and sell things simultaneously if they settle the same day.  You have a much harder time selling a stock (T+3) and immediately buying a mutual fund (T+1), because you won't actually have your cash from the stock sale until 2 days after you need it for your mutual fund purchase settlement.

Answer 3

You get what you pay for.

:-)

Three days is for trade settlement.

Yes, many other brokers will let you trade against settlement funds, all things being equal.

Answer 4

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