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Thanks for explaining. Does this mean that each time a “day trader” makes a sale of $N, the minimum cash they hold over the next 3 days must be at least $N? Or

Thanks for explaining. Does this mean that each time a “day trader” makes a sale of $N, the minimum cash they hold over the next 3 days must be at least $N? Or does the exchange not make the cash available for 3 days? Also, can the same stock be re-bought within 3 days? I’ve seen a lot if different takes on these issues, and an unsure what to believe.

jnwatson 6y ago
When you sign up for a brokerage account, you select whether you want a “cash” or “margin” account. In a margin account, the brokerage essentially loans you the money until the sale clears. Day traders use margin accounts. You can indeed buy the same stock back, but it has tax implications. Look up “wash rules”.
- aparsons 6y ago
  Thanks for explaining