Margin interest charged in my Roth IRA [Newbie] - MarketTicker Forums


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User Info	Margin interest charged in my Roth IRA in forum [Newbie]
Treefrog Posts: 310 Incept: 2008-03-21	I have my Roth IRA at Firstrade, and they don't allow margin within Roth IRAs. However, I looked at my statements recently and noticed two "margin interest" charges ($8.34 on 1/18/2011 and $12.52 on 2/16/2011, $20.86 total). This is the first time I've ever been charged margin interest in the 5 years I've had my Roth with them, despite many transactions and trades in those 5 years. I emailed their customer service to ask why they charged me this when margin isn't even allowed in their Roth IRAs, and they replied: "Thank you for e-mailing Firstrade. Kindly be advised that the debit interest was created from your sale of 151 SPDR S&P 500 ETF TR (1/13/11) which did not settle until 1/19/11. However, you used the unsettled cash to purchase 2,292.23600 *VANGUARD FIXED INCOME SECS on the same day. Therefore, interest was charge for the uses of unsettled funds from 1/13/11 -1/19/11. As debit interest is charged semi- monthly, the interest was charge separately since it fell between 1/15. Thank you for your understanding." Were the margin interest charges legitimate, even when margin isn't allowed in my Roth? If so, do all brokerages do this in Roth IRAs? ---------- “Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited." -George Soros 2011-07-11 22:55:53 Permalink*
Genesis Posts: 130798 Incept: 2007-06-26	You're lucky you didn't get restricted for trading on unsettled funds..... ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2011-07-11 22:57:09 Permalink
Steelpiston71 Posts: 4868 Incept: 2007-09-05 Michigan	Would it be so hard to show the balance available for trading that is settled right alongside all the other balances in the account? Zecco has this info buried in the options. ---------- "We have resolution authority under Frank/Dodd... How about we USE IT?" Karl Denninger, 10/07/10 on the Dylan Ratigan Show, MSNBC. 2011-07-11 23:43:14 Permalink
Asimov Posts: 104066 Incept: 2007-08-26 East Tennessee Eastern Time	With TOS, if you have the left side window of the main window expanded (where news and stuff is), look for the wrench button at the top. Click it, then click the wrench button that pops up in the center of the account info window. Alternately, if you have that left pane minimized and your account info is displayed along the top of the screen, the wrench is on the far right. Here's the window that pops up, and the top item on it. [Edit: Odd, I can't get it to display.] ---------- It's justifiably immoral to deal morally with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente. Last modified: 2011-07-12 01:34:43 by asimov Reason: 2011-07-12 01:33:17 Permalink
Patmcgroin Posts: 8223 Incept: 2007-09-12 Chicago	Totally legit. In a cash account you're supposed to let funds settle before re-investment. And you only run afoul of Reg D if you sell the newly purchased shares before the funds are settled. ---------- "I know a few arcane, obscure financial acronyms that the general public doesn't know and that's about it." 2011-07-12 06:43:31 Permalink
Connieg Posts: 860 Incept: 2008-06-08 Houston, TX	treefrog-You sold it at a wrong time-it takes 3+1 to settle, but you sold before weekend+Martin Luther Jr., hence 6 days. Sorry. ---------- "Go long...something" Me 2011-07-13 14:39:23 Permalink