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New Retiree question. Use more than one retail brokerage for whatever reason ???
Hi @hank et al I recall others here, over the years writing about similar restrictions at other organizations, too, regarding restrictions; trading mutual funds (OEF's). This is a general Fidelity overview, believed to be accurate. Full legal details are available at their web site, regarding trading restrictions. --- Fidelity has strict rules regarding trading its own funds to discourage excessive, short-term trading. These include a "roundtrip" policy that blocks future purchases for 85 days after a second roundtrip is made within 90 days or the fourth across all Fidelity funds in a 12-month period. Other rules include specific trading restrictions for different account types, such as pattern day trading restrictions for margin accounts, and restrictions for "good faith" and "free riding" violations in cash accounts. Excessive trading policy Roundtrip limit: A roundtrip is defined as a purchase and then a sale or exchange sell of a mutual fund within 30 days. Second roundtrip: A second roundtrip in a single fund within 90 days results in an 85-day block on purchases and exchanges for that fund. Four roundtrips: Making four roundtrips across all Fidelity funds within 12 months will trigger an 85-day block on purchases and exchanges for all accounts linked to the same Social Security number. Exemptions: These rules generally do not apply to amounts under \(\$25,000\), Fidelity Money Market Funds, dividend/capital gains reinvestments sold within 30 days, or through automatic investments/withdrawals. Account-specific restrictions Margin accounts: Day trading is defined as buying and selling the same security on the same day. Pattern day traders must maintain a minimum equity of \(\$25,000\). Cash accounts: "Good faith" violations can occur by selling a security purchased with unsettled funds before it settles. A "free riding" violation occurs when you sell a security without ever having paid for it. Consequences: Three good faith violations or one free riding violation in a 12-month period will result in a 90-day restriction requiring you to trade only with settled funds. Day trade calls: For margin accounts, a day trade call is generated when opening trades exceed your day trade buying power and are closed the same day. Meeting calls: You have five business days to meet a day trade call. Restrictions: Three day trade liquidations (selling an existing position to meet a day trade call) within a 12-month period will result in a restricted status. Other trading rules Day trading: A "pattern day trader" is generally defined as someone who executes four or more day trades within a 12-month period. Good faith violations: Selling a security that was purchased with unsettled funds before the funds have settled is a "good faith" violation. Free riding violations: This occurs when you sell a security without ever having paid for it. Restrictions: Violations can lead to trading restrictions, such as the 90-day restriction to only use settled funds.
Hi @Derf NOPE ! The mutual funds we held were with purpose, so we never had a need to trade frequently. And with the current buy just about anything menu with a Fidelity brokerage account, we could travel to other market vendors and areas as needed. The official beginning for Fidelity and the discount brokerage was in 1979. We were so busy with our work, that we selected traditional mutual funds for our investments. In 1981 Fido started 'select funds' (sectors) that could be traded on an hourly basis. These opened a whole new window for retail investors. We could do trades with a 'TouchTone' phone....way, cool in 1981. And now, everyone has an 'ETF' for whatever. Good evening. Catch
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I recall others here, over the years writing about similar restrictions at other organizations, too, regarding restrictions; trading mutual funds (OEF's).
This is a general Fidelity overview, believed to be accurate. Full legal details are available at their web site, regarding trading restrictions.
--- Fidelity has strict rules regarding trading its own funds to discourage excessive, short-term trading. These include a "roundtrip" policy that blocks future purchases for 85 days after a second roundtrip is made within 90 days or the fourth across all Fidelity funds in a 12-month period.
Other rules include specific trading restrictions for different account types, such as pattern day trading restrictions for margin accounts, and restrictions for "good faith" and "free riding" violations in cash accounts.
Excessive trading policy Roundtrip limit: A roundtrip is defined as a purchase and then a sale or exchange sell of a mutual fund within 30 days.
Second roundtrip: A second roundtrip in a single fund within 90 days results in an 85-day block on purchases and exchanges for that fund.
Four roundtrips: Making four roundtrips across all Fidelity funds within 12 months will trigger an 85-day block on purchases and exchanges for all accounts linked to the same Social Security number.
Exemptions: These rules generally do not apply to amounts under \(\$25,000\), Fidelity Money Market Funds, dividend/capital gains reinvestments sold within 30 days, or through automatic investments/withdrawals.
Account-specific restrictions Margin accounts: Day trading is defined as buying and selling the same security on the same day. Pattern day traders must maintain a minimum equity of \(\$25,000\).
Cash accounts: "Good faith" violations can occur by selling a security purchased with unsettled funds before it settles. A "free riding" violation occurs when you sell a security without ever having paid for it.
Consequences: Three good faith violations or one free riding violation in a 12-month period will result in a 90-day restriction requiring you to trade only with settled funds.
Day trade calls: For margin accounts, a day trade call is generated when opening trades exceed your day trade buying power and are closed the same day.
Meeting calls: You have five business days to meet a day trade call.
Restrictions: Three day trade liquidations (selling an existing position to meet a day trade call) within a 12-month period will result in a restricted status.
Other trading rules
Day trading: A "pattern day trader" is generally defined as someone who executes four or more day trades within a 12-month period.
Good faith violations: Selling a security that was purchased with unsettled funds before the funds have settled is a "good faith" violation.
Free riding violations: This occurs when you sell a security without ever having paid for it.
Restrictions: Violations can lead to trading restrictions, such as the 90-day restriction to only use settled funds.
The official beginning for Fidelity and the discount brokerage was in 1979. We were so busy with our work, that we selected traditional mutual funds for our investments.
In 1981 Fido started 'select funds' (sectors) that could be traded on an hourly basis. These opened a whole new window for retail investors. We could do trades with a 'TouchTone' phone....way, cool in 1981.
And now, everyone has an 'ETF' for whatever.
Good evening.
Catch
In 1981 Fido started 'select funds' (sectors) that could be traded on an hourly basis.
@catch22 Interesting & have a bountiful Thanksgiving,Derf