Suppose you have $0 balance in a cash account. You buy ABC for $1000, and sell it for $1050 on the same day. Is it a free riding violation?
Yes, as the SEC explains, Federal Reserve Board's Reg T requires that you pay for the purchase of a security before you sell it:
In a cash account, an investor must pay for the purchase of a security before selling it. If an investor buys and sells a security before paying for it, the investor is “freeriding” which is not permitted under the Federal Reserve Board’s Regulation T and may require the investor’s broker to “freeze” the investor’s cash account for 90 days.
Free riding in general means buying without having the money to do so (generally, using unsettled funds from its own sale to cover the cost). At the retail level, your broker will generally have rules that prevents free riding in your account. Your broker is incentivized because the fundamental problem is that you effectively borrowed money without actually borrowing it and paying interest on it.
In a cash account, what you describe is kind of the classic case of free riding. You didn't have any money in your account to make the purchase. Instead you paid for it with the revenue from its own sale and your broker would have been on the hook if the price had fallen.
In a margin account, which many brokerage accounts are, the definition is a little more foggy because every transaction is paid for with borrowed funds. In this case your broker will let you know what type of transactions are prohibited (and it will vary by broker).
Nope. It is called day trading.
THAT SAID - you will not be able to execute the buy with 0 balance. This is quite standard for many day trade operations where "0 balance" means "no profits for the day on YOUR account" not "no money at the broker" (as the broker accounts are owned by the company).
Otherwise no broker will let you buy stock with 0 balance - you lack the funds for fees and have no collateral against the margin you need to execute the buy.