I noticed I can buy and sell multiple positions multiple times throughout the day. I am new to trading and understand this carries a high level of risk.
But, just checking - is this normal/ok/advised? I have a relative in the US who says that he cannot do this (max 4 trades) due to rules on the US platform but I am able to do it on US stocks, even though I am in the UK.
Thanks in advance all!
You can buy and sell a billion times a day, if you would like to.
The PDT or other day trading rules don’t apply here, first because it’s not a margin account, secondly T212 doesn’t enforce any restrictions
What is PDT and why don’t they apply? I have an ISA. Thanks!
PDT is Pattern Day Trading rule… which enforced in US by US brokers to investors who have a margin account (which means you borrow from your broker).
Under this rule a investor must have 25.000 USD in their margin account to bypass this rule. But if you have a cash account, like Trading 212, this rule doesn’t apply.
That’s why you can buy and sell as many times as you want… 
Sorry for piggybacking on your thread, Tex, but I have similar concerns.
Just to check, as saifali says, T212 offers cash accounts. Does that mean we are at risk of cash trading violations if we trade US stocks using unsettled cash? (https://www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations) And if so, is there a way to know when exactly our cash is settled?
@David - tagging you in case you or someone in the 212 team can help.
That’s a benefit with T212 (and even some US brokers I use) that you can trade with unsettled funds.
But if you sell the securities that you bought with unsettled funds within 2 trading days (T+2), you get a penalty. Now with T212, they are not a direct access or primary broker, and since they work with IBKR as their broker-dealer and custodian, where all our shares are held, I’m assuming they have a credit line that is not limited by these restrictions, since our purchases are wrapped within their interaction, I say we can buy and sell on unsettled with T212, unless they change that in the future, which of course will be very sad.
Plus with T212, this is further supported by the fact that you can withdraw funds as soon as you liquidate (although it takes a day or 2 before it’s approved by the team), unlike US brokers with cash accounts.
Thanks, Saifali.
Sorry, if I’m being too risk averse, but do you know if it’s documented anywhere on the T212 website that they are able to help their clients avoid these cash account restrictions by virtue of a credit line with IBKR?
These sections from the Share Dealing Service Terms of Business and the Free Shares Promotion T&Cs give me pause:
7.1. All Deals transacted between us will be carried out in accordance with the standard settlement practices and/or market rules of the relevant exchanges.
2.2. After the Promotion Share has been allocated to You it will be subject to a settlement period of 3 days. You will only be entitled to sell the Promotion Share upon expiry of the aforementioned 3-days settlement period.
I’m also not quite sure to make of 7.5 from the Share Dealing Service terms.
7.5. Investments held for you in custody will be used to settle your sale Transactions. Otherwise, in respect of all sale Transactions you:
- confirm that, at the time of placing an order to sell, you own the relevant investments; and
- will immediately arrange for delivery to us of the certificates and transfer forms signed by the shareholder for such Investments, at the latest by the contracted settlement date, otherwise, payment to you may be delayed.
What do you reckon?
First about the free shares, that only applies to the promotion, not to general sale and purchase.
Secondly the sections you quoted indeed say so, but I personally think these statements are perhaps forward-looking or basically just to comply… but indeed trades are settled in 1-3 trading days… it’s just that T212 doesn’t restricted day trades.
As for documentation for this, a few days ago I read a post on the community where T212 team said there is no restriction on buying and selling stocks multiple times a day.
I’ll try to find it and attach below, you can also search.
Check this post:
Dear Saifali,
I am sorry to bother you with the same question again but can you please help me to understand if what I am planning to do will be OK or not because I don’t want to get in trouble from the first day of trading.
I am based in the UK, I have an Invest account where I will deposit 17,000.
My question is if I will be able to buy for example: 5 AMZN shares for 3200/each at 15:00, sell them at 15:40 for $ 3215/each and keep repeating this throughout the day.
Will this be considered buying with unsettled funds?
It’s 100% fine to do that.
ps: if you are not an experienced trader, don’t do daytrade in any hypotheses, you will most likely to lose A LOT of your money.
I agree with @laguiar . Day trading is fine and very profitable if you are experienced and prescribe to being that type of speculative day trader. BUT this is very high risk, and honestly, easier said than done.
I follow the Benjamin Method – find stocks that are systematically undervalued (ie conduct detailed background research into a company, including balance sheets, previous success of board members, debt levels etc to determine if the stock is undervalued). Buy stocks cheap (often in a bear market), hold for a long time (at least 5 years), and then think about selling stakes as the stock price increases and starts to reflect the real value of the company.
For anyone interested, I hugely recommend buying Benjamin Graham’s The Intelligent Investor as an e-book (the physical book can be a heavy read).
This is not financial advice but rather insight into Graham’s trading philosophy/strategy. I currently invest in American and Canadian gold and silver mining companies.
Like @laguiar and @dbarwick1, the Invest account let’s you do that (day trades), as many as you wish - but day trading is very dangerous and if you are just starting off, you’ll most probably loose money. Especially on volatile stocks and penny stocks. AMZN on the other hand is not cheap, but it also packs tonnes of volatility.
I suggest you rather swing trade, which could be anything between a day or a month between buying and selling each stock. This is more predictable and consistent compared to day trading.
Day trading on T212 is not ideal because you can only go long here and there’s no margin, so if you get stuck in a big position, you can not average out without adding more funds.
you could buy -1x Microsoft (MSFS) for instance to go short
Well ETPs offer an indirect way of shorting an equity stock, they are volatile and controlled by MM.
Thank you so very much for all your answers.
I appreciate your advice.