Iras Rules
May 3rd, 2009
Question: Does the pattern daytrading rule apply to retirement accounts, like an IRA?
If I buy a 50 shares of say QID in the morning. Then later buy another 50 shares of QID later that day. Then before market closes the same trading day, I sell all 100 shares. Does that count as 1 or 2 roundtrip trades?
Answer: I would say one but ask your account rep. The deal with IRA“s is that you must wait three days for funds to settle before you can sell twice. In other words if you own 50 QID and sell it you may then use those funds to buy QID or something esle but cannot sell again until funds settle or you will be in violation of the free ride rule. In odrer to day trade much you would need a very large cash reserve. I couldn’t tell you if the 5 pattern day trades per week applies to an IRA but I see problems attempting to day trade the account because of the affore mentioned rule.
Estate-Planning_IRAs.mp4
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