I trade pretty often. Mostly OTC, and $3-$5 range stocks too. I feel like the 3 day settlement date after selling is a really big time delay, and I wanted to get some tips from people, so I can optimally trade and sell everyday. I have around $2000 in my account, if that matters.

  • 1
    What's the question?
    – littleadv
    Jan 15, 2012 at 23:56
  • Yes, please elaborate how the "settlement day always gets in the way"? Jan 16, 2012 at 0:17
  • 2
    The three days between the actual "sell" and the cash showing up in his account (settlement) means he has to wait before buying another stock, since he doesn't have cash to cover the buy. Jan 16, 2012 at 2:50
  • 4
    @Adam - not really. You can buy with unsettled funds. There are rules that regulate cases when you buy and sell while the funds are still unsettled, though.
    – littleadv
    Jan 16, 2012 at 3:28
  • @littleadv Ah, I guess I haven't tried to sell and then buy that fast without having other cash in there that would have covered the transactions anyway. Jan 16, 2012 at 3:50

4 Answers 4


If you are using the same broker for each buy and sell order, then that broker should include any funds from a sale of shares, even if it has not settled yet.

Example, if you currently have $1000 cash in your account and sell $1000 worth of shares on day 1, then on day 2 you should have available $2000 to buy something else. Even though your sell order on day 1 doesn't settle until day 4, your buy order for day 2 will not settle until day 5. So the funds from the sale on day 1 will always settle before your buy order on day 2 settles.

So even though the funds from a sell order cannot be withdrawn from the account until settlement, they should still be available for trading. Check with your broker, as this should be feasable.

  • 1
    The really important piece of information left out here, is if you buy a position with unsettled funds, then you cannot sell that position until the funds used to buy it are settled. This means in the above example, on day 2 you have $2000 and buy something, you will have to hold the position until the funds used to buy that position are settled. I.e. you can immediately use the funds from a sell to buy more stock, but then you must hold that stock while waiting for the funds used to buy it are settled.
    – AaronLS
    Aug 24, 2016 at 20:43

Margin account.

the pattern day trader rule applies to margin accounts though that have a balance of less than $25,000. this means that you can't daytrade more than 3 times in a 5 day period. if you break the pattern day trader rule, your account is locked up for 90 days, unless you switch back to a cash account

you only have $2,000 , with a bit more cash (but still under $25,000) you can simply open multiple margin accounts and trade more often, to get around that rule

you can also open up a professional account at any prop firm and trade as much as you like. as the pattern day trader rule only applies to retail margin accounts.

  • 1
    Margin account is the right answer. But the stuff about the pattern day trader rule has nothing to do with the question. Someone with over $25K in a cash account wouldn't be subject to the PDT rule, but would still run into the same problems as the OP if they traded too frequently.
    – 7529
    Oct 11, 2018 at 13:57
  • @pacoverflow you're right, in this case it would be better if it was merely an informative addendum to opening a margin account. the margin account fixes his settlement time problem if he was using a cash account.
    – CQM
    Oct 11, 2018 at 18:28

I think the best option is simply keeping enough free cash in your account that you can cover any buy order you want to place before the proceeds of your sell order show up in your account.

One other option that I think would work for this is to use a margin account. You would be putting the other securities in your account up as collateral and borrowing against them. I don't like the idea of using margin accounts to heavily leverage your portfolio, but if you can discipline yourself to not borrow beyond what is on its way into your account from your sold-but-not-settled securities, I don't see a problem with it.


You will want to verify that you have a margin account if you do not already. If not, and you buy with unsettled funds, your broker may deny use of the funds.

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