Interactive Broker Settled Cash

[cpatte7372]

Hello,

I'm a little confused with the way Interactive Broker calculates settled cash.

I have account currently stands at $4981

My "Equity With Loan" currently is $788

Settled Cash is $788

I currently have shares worth $197.

My "Total Cash Value is 4981-197 = $4784.

My question is, how did IB arrive at the Settled Cash of $788? I understand that settled cash is the amount that I have to purchase stock with(buying power) however, I'm confused as to how they got that sum.

Can someone please enlighten me?

Cheers

Carlton

[cpatte7372]

Hi,

I have just spoke with IB and the situation is a little clearer, although I still need a little further clarification.

My understanding is that when my past trades have cleared - which is Trade day + 3 I will have the total amount of $4981 available to me. However, until they have been cleared I only have $788 available to me. That much I understand.


Now, is this based on the number of trades I have recently carried out? - I think the new regulations requires that you are allowed to carry out 5 trades before you're deemed a day trader. If that is the case do I have to wait until each trade has been cleared. For example, if I placed an order on day one, then on day three placed another order would I have to wait until (1st trade + 3 days) + (2nd trade + 3) = 8 days?

I really hope I have made myself clear.

I hope someone is able to help me figure it out.


Thanks

Carlton

[christineesq]

daytrades toward daytrader limits are a separate issue from settled funds

settled funds are the true amount of cash in your account after all trades have cleared and settled.

daytrades are buys and sells within the most recent 5 business days. There is a nice entry under Margin requirement on the Account page at IB for Day Trades left.

[cpatte7372]

christineesq,

Thanks for getting back to me. However, I'm not sure I understand what you mean. Having recently spoke with a representative from IB, I was told that after all the positions have been cleared I will have $4981 available to me. Unless I have misunderstood you, I think you're suggesting that I have only $788.

Carlton

[christineesq]

my post was to try to show the differences between the application of the daytrader rule as opposed to the settlement of funds concept.

You cannot do 4 daytrades in 5 days unless your account balance is over 25 grand

[cpatte7372]

christineesq

May be I'm not being clear. There are essential two things that I'm confused with;

1) How the Settled Cash is calculated? For example, IB state I have $788 buying power (settled cash) Do you know how that sum is calculated?

2) When my total available cash will be available? Lets say I have $5000 in my brokerage account, and if I placed an order (order 1) on, say, 01/01 and another order (order2) on 01/03, and I was totally even less commissions would by total cash be available on the 01/06?

Its really confusing....

Cheers

Carlton

[DuaneG]

Hi Carlton,

You may want to check with IB and see if they have any additional information regarding the clearing firm that they use. It has been my experience that the clearing firm will have more in depth information about cash balances and settlements. Hope this helps.