I understand the purpose of having enough funds to make stock purchases.
But I don’t understand when the funds are available for trade after selling stock.
It was my understanding:
- Buy stock A on Monday
- Sell stock A on Monday afternoon
- I can use the funds from that sale to buy stock B on Monday, but I can’t sell stock B until T+1
- Tuesday morning I can sell stock B
But selling stock on Tuesday has given me a Good Faith Violation. So I am not understanding something.
I know that they say you need the funds to be settled, but even after 4 days the funds never say that they are “settled”
For reference I am looking at Fidelity’s webpage
Can anyone help me understand how to avoid Good Faith Violations?