Schwab tells me that Money Market and all of their Mutual Funds settle at T+1. Suppose I have $1000 in a Money Market and I wish to buy $1000 in an SP500 index Mutual Fund. I issue a sell order for the Money Market, and simultaneously issue a buy for the Mutual Fund.
The next day at 4pm the Mutual Fund price is computed and the buy is executed at around 6pm ET. Simultaneously the Money Market sale completes. What happens if the transactions happen in this order, though? In other words, what happens if the buy executes first and I lack the cash to settle?
I would hope that the sell would settle first and I would have the cash to execute the buy, but I can't find any documentation explaining any of this.