Basic Question

Discussion in 'Ask any question!' started by NeedSomeAnswers18, Oct 4, 2021.

  1. NeedSomeAnswers18

    NeedSomeAnswers18 New Member

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    Hello. I have a basic question. Let's say I purchase a share of stock #1 and hold it through closing. The next day I decide to sell my share of stock #1 and buy a share of stock #2 and hold it through closing. That is not a day trade, correct? If I were to sell my share of stock #1 and then buy a share of stock #1 later the same day that would be a day trade, right?

    Thank you.
     
  2. JohnnyTradeInvest

    JohnnyTradeInvest New Member

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    Good question.
    I'm new at this, but definition seems to vary for different online brokerages.
    The first two examples do not look like day trading to me, as the positions were held through closing (not intraday).
    In the last example, for only selling then buying in same day, I cannot see anything on Robinhood's day trading rules that would deem this a day trade. You would have to sell-->buy-->sell again in one day for it to be a day trade. (https://robinhood.com/us/en/support/articles/pattern-day-trading/)

    However, TD Ameritrade appears to deem this a day trade: "A “round trip” simply means opening and closing a security position. Whether you buy or sell to open, when you close the position, you’ve completed a round trip. If you did it within a single trading day, you’ve made a day trade. (https://tickertape.tdameritrade.com/trading/avoid-violating-pattern-day-trader-rule-18005)
    Not sure what other brokerages say though...
    So I think it really depends on the brokerage.
     
  3. B Russ

    B Russ Well-Known Member

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    If i open a position at 2:59 thursday and close it at 8:01 friday, its not a daytrade. I think thats everyone. U may may check with your broker, but i think thats a federal rule…

    but if i open a position at 8:01 thursday and close it at 2:59 same day, its a daytrade
     
    JohnnyTradeInvest likes this.

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