Does any one know if I close an overnight position I can't use margin again until next day?
<I used to use Watley - and they are a terrific firm to deal with in all respects except one SouthWest adheres strictly to an SEC regulation that does not permit you to margin securities overnight, sell them the next morning, and then use the proceeds to buy the same named issue afterwards on the date of sale. You can use the proceeds to buy a different named security, but then you cannot sell it until the following day. This rule does NOT apply to any free cash balance in your account - only to margin amounts that are borrowed to finance your activity.>
The description of Watley's proceedure in your post is the same for MB. I had to write them a $22,000 check awhile back, so I know. If you're carrying a sizeable portion of your account overnight (in my case 1000 Dell in a 100K account) and then close the overnight and trade DELL again, your going to get a call from big Bruno. Pay up or we close the account. As soon as you close the overnight however, you can use it to trade anything but what you were holding.
This can be a major impediment. For instance, if you think DELL will gap, fall off hard, then fill...pick the part you're going to play, because at this time with MB you cannot hold overnight for the gap, sell at the open, buy on the retrace, and then sell or hold. Unless you can send them a check of course.
Jay |
