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Does selling then buying same stock qualify as Day Trading (or pattern trading)?
All the information I have read about this suggests that Pattern Trading (with it’s 3 trade/5days restrictions) means opening and closing a trade in the same day.
What I did not understand for sure, lets say if I sell existing positions and buy the same stock the same day, does that qualify as pattern trading?
Clarification, I’m not selling at a loss.
I bought positions 1 day ago, now I want to sell it on high today and repurchase it if it goes low (+comis)
Okay first I can’t answer this questions as you’ve asked it, however maybe this will help. You can in fact sell then buy again if it drops, you can’t however use the funds aquired from the sale to purchase anything until they clear. It takes 3 days for funds to clear according to the trust department where I work. As far as I know you can in fact do what you are wanting to do if you have additional funds in the account to purchase with.
3 Responses to “Does selling then buying same stock qualify as Day Trading (or pattern trading)?”
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No, Pattern trading is buying then selling, but if your selling an existing position then buy it you will be ok as long as the
buy is covered by the proceeds of the sale.
The purpose of such restrictions was to have all purchases paid in full with good funds before any sale was made and the sale proceeds could not be used to cover the purchases amount.
This why that pattern traders, need to have equity in their account at all times.
References :
Industry experience
Saying that you have to buy then sell is wrong. You can sell then buy. It’s called short selling. The question is how long were you holding the positions?
If they were longer therm positions, why did you do this? It won’t lock in a tax loss because of wash sale rules, which you should look into anyway.
References :
Okay first I can’t answer this questions as you’ve asked it, however maybe this will help. You can in fact sell then buy again if it drops, you can’t however use the funds aquired from the sale to purchase anything until they clear. It takes 3 days for funds to clear according to the trust department where I work. As far as I know you can in fact do what you are wanting to do if you have additional funds in the account to purchase with.
References :