I have been using a cash -- i.e., no margin -- Ameritrade account for most of my trades for the last year. Not a big deal, but something happened last week that I don't recall happening before.
I had a small amount of funds in a money market sweep account. I put in an order to sell one security and then immediately used most, but not all, of the proceeds to buy a different security. Toward the end of the day, I attempted to electronically transfer part of the funds in the money market account to my checking account. I have made such transfers numerous times without incident.
However, this time, I was advised that I did not have funds available for the transfer. It seems Ameritrade used my "settled" funds -- the funds in the money market account -- to pay a portion of the cost of the new security I bought and the remaining funds in my account would not be "settled" and available for withdrawal until the settlement date for the sale I made.
I have a general understanding of Reg T settlement issues. I did not understand that Ameritrade was obligated -- as they have now claimed -- to first apply my settled funds to the purchase transaction. Does anyone know if this is true? Thusfar, I haven't found a reg -- or even a disclosure on the Ameritrade website -- that says this is required.
The lunacy of this policy is that if I had transfered the funds at the beginning of the day and made the sale and purchase afterwards, all would have been fine and I would have had my funds three business days ago. As it is, I have had to wait three days to access my funds.
As I said, not a big deal, but frustrating.