a mistake in transaction

[saratoga]

I made a mistake in selling and buying some etfs today in a Roth account.

I was watching funds available as I was purchasing at market.

But apparently, the funds available was not reflecting fully the transactions thus far.

After all transactions executed, I find that I have -$9000 cash balance.

Since the market is closed, I think I will call Vanguard tomorrow.

I guess I can just sell some etfs up to the deficit amount.

Any comments?

[yogibearbull]

NEVER trust funds shown as available on the general Portfolio of Holdings page.

True balance is on the Balance page shown as "funds available to withdraw" or "funds available without margin impact".

ETFs have T+2 settlement and that cash isn't really available on the trade date.

If everything will balance out in 2 days, VG may overlook this one time.

Some brokers will not even allow trades without settled balanced in IRAs, or some may allow expecting funds to be wired the next day.

[saratoga]

I thought a transaction would not execute if there was not enough funds available.

But apparently, the brokerage does not know correct funds available at each moment.

I will try to sell some etfs tomorrow.

Hope this solves the problem.

[gman57]

I know at VG when I try and enter a trade it'll pop up a window saying "you don't have enough funds..." - I never read the whole pop-up because as soon as I see the pop-up I know I have to go change something. I think it'll allow me to make the trade and expect the money by settlement date but I never have. I've been in the temporary doghouse (restricted trading ) a few times by trading with unsettled funds.

[anitya]

How did your Roth account allow you to overdraw, even by a penny? Are Vanguard systems so crappy? I know they are bad near the time of the market close.

After assuming all your transactions are settled T+0, if you were truly overdrawn, I would sell tomorrow promptly to make the account whole. You could have fixed matters by selling in the after hours, especially if you are trading widely followed ETFs like SP 500 or QQQ. Hopefully, they do not take away your limited margin privileges for this inadvertent mishap.

P.S.: Vanguard takes time to reflect in the Quantity in the Holdings page for your executed buys and sells. Always check order status first before submitting duplicate orders. If you are unlucky, the order status page could be down and your holdings page is not updated.

[anitya]

Nov 2, 2023 0:58:42 GMT gman57 said:

I know at VG when I try and enter a trade it'll pop up a window saying "you don't have enough funds..." - I never read the whole pop-up because as soon as I see the pop-up I know I have to go change something. I think it'll allow me to make the trade and expect the money by settlement date but I never have. I've been in the temporary doghouse (restricted trading ) a few times by trading with unsettled funds.

You can ask Vanguard to allow you to trade with unsettled funds - limited margin - you may have to accept and sign some long online agreement. 

[fritzo489]

Did that a few years back ! I purchased the same fund 3 times instead of three different funds at the same amount. Made a call & was able to straight things out before close of business that day.

  More recently I had something maturing & bought T-bill, the same day with settlement three days away. Received pop-up , saying okay if money for purchase would be available by settlement of purchase.

       

[yogibearbull]

Even in IRA a/c, Vanguard accepts ETF orders (T+2) with the warning that money is due by settlement date. It may then be OK if things even out by the settlement date. However, mutual fund orders (T+1) aren't allowed without sufficient cash in core/settlement a/c (a screen opens up to makeup for any deficit - via transfer from another VG a/c or linked bank). As they say, buyer BEWARE. Call VG anyway.

Fido and Schwab don't allow orders in IRAs without sufficient cash in core/settlement a/c. In taxable a/c with margin, it isn't an issue.

[bruno]

I have tried to buy new issue Tbills in taxable at Fido with one maturing on thursday and CANT. I have to call Fido to have it done.

[yogibearbull]

Nov 2, 2023 13:41:15 GMT bruno said:

I have tried to buy new issue Tbills in taxable at Fido with one maturing on thursday and CANT. I have to call Fido to have it done.

Not only that, Fido auto-roll apparently WAITS for T-Bills to mature and then auto-roll from proceeds in the FOLLOWING week. I cancelled an auto-roll - I can do better manually in taxable MARGIN a/c with new T-Bill Auction purchases on Monday/Tuesday offset by maturing T-Bills on Thursdays (but limitations apply for taxable a/c w/o margin and IRAs). Posters have indicated that Schwab auto-roll works similarly. Vanguard doesn't have auto-roll yet.

Moreover, I am stopping my T-Bill rolls starting THIS week.

[bruno]

Nov 2, 2023 13:53:38 GMT yogibearbull said:

Nov 2, 2023 13:41:15 GMT bruno said:

ANY HINTS whats next for those funds?         

[yogibearbull]

bruno, as mentioned elsewhere, some into m-mkt and ultra-ST funds (they have all caught up with T-Bills), and some into multisector and HY funds.

[saratoga]

I sold enough etf shares to cover the deficit this morning. In the afternoon, I called Vanguard. The agent said everything looks ok.
I hope she is right.

[catdog]

I bought a security through fido selecting my brokerage account, when I meant to select my TIRA. Was not enough in brokerage account to cover the trade. I called them right away and they gave me some scare tactics about a tax implication. Nothing happened and I put the trade through my TIRA. I always double check
which acct I use now.

catdog

[anitya]

Nov 8, 2023 23:24:21 GMT catdog said:

I bought a security through fido selecting my brokerage account, when I meant to select my TIRA. Was not enough in brokerage account to cover the trade. I called them right away and they gave me some scare tactics about a tax implication. Nothing happened and I put the trade through my TIRA. I always double check
which acct I use now.

catdog

When you immediately sold the security in the taxable account, whatever gain or loss you had I am assuming was nominal.  If you had a loss and then bought the same security in the TIRA, the IRS thinks (and they put out a revenue ruling in support of their position) that the loss is disallowed.  May be that is what Fido Rep was trying to tell you.  In any case, as I mentioned elsewhere, I had received bad advice from Reps at every brokerage I have / had an account with and many are written advices.  I do not have a solution to this issue, other than being aware of the possibility.

It is possible the Fido default account in your trade ticket is the account you trade the most from.  For me it always defaults to my TIRA and then I change the account in the ticket to the taxable account if that is what I want.  Did you ask the Fido Rep why your trade ticket defaults to your taxable account?  I would like to know the answer for sure, rather than my guessing.