Mikey,
DLJ responded to my email about buying and selling a security all in the same day as follows:
In response to your inquiry, you are referring to a practice known as
"daytrading". According to regulation T, daytrading is prohibited in a cash account and only allowable in a margin account. If you purchase and sell a stock without full payment for the purchase being
received in a cash account, this practice would require us to place your account on restriction for 90 days. This restriction is mandated under Regulation T of The Federal Reserve.
If the stock was fully paid for by funds being present in the cash account, you would not be subject to this restriction. However, the funds would not be available to purchase another stock until the following day.
In a margin account, your buying power, which is the amount of funds you could borrow against the stock in your margin account, would determine how much you could daytrade. Basically, if you had $10,000 buying power, you could purchase $10,000 of stock and then sell that and then buy another $10,000 worth of stock with the proceeds of the sale. If you exceed your buying power at any time during the trading day, you would have to come in with additional funds otherwise you would not.
FWIW,
-M |
