Free ride under Federal Reserve Regulation T?
I’m buying/selling stock, and I got a message that said that if I sell before a settlement date, then it would be considered a free ride under Federal Reserve Regulation T.
WHAT IS THIS?
WHAT DOES IT DO? AND WHAT HAPPENS TO ME IF THIS HAPPENS?
Thanks
But…what does “free riding” do/mean?
Yes, Funds from selling stocks take 3 business days to settle, and funds from options take just 1 day. If you violate this regulation your broker is likely to suspend you from any trading for a period of time, likely 90 days.
Mark
