If I purchase a stock with unsettled cash, and then it immediately spikes, is there a way to use margin to sell it without invoking a good faith violation? Essentially borrowing the money until it settles from the previous transaction?

  • 1
    Do you have a cash account or a margin account?
    – Matt
    Commented Feb 23, 2021 at 17:31
  • @Matt- I can buy with either in my account, so I am approved for a margin purchase. I'm not really interested in borrowing the money except in the case that I want to realize a quick gain and get out of the stock before the cash settles.
    – David
    Commented Feb 23, 2021 at 18:55

1 Answer 1


For purchases:

You can only trade with settled cash in a margin account.

A margin account allows you to borrow cash from your broker to purchase additional securities (leverage). This is collateralized by cash and marginable securities in your account. You pay margin interest on the amount of the loan and must maintain sufficient margin should the price of your security(ies) drop.

You may also trade in a margin account with your own cash (no leverage). Since you are not borrowing money, you do not pay interest or fees. However, you are allowed to trade with unsettled funds.

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