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Equities Account Questions

Opening an Account with TradeStation

How do I open an account with TradeStation?

There are two ways you can open an account with TradeStation.

  • If you are a U.S. resident with a valid taxpayer identification number or Social Security number, the fastest, most convenient way to open a futures, forex, or equities/options account is by using our online application process. You may use this process to open Equities Individual, Tenants in Common, Joint Tenants with Right of Survivorship, and Traditional/Roth/SEP IRA accounts. You can open multiple accounts across multiple asset classes during your session.
  • For international, futures and forex IRA applicants or applicants establishing an account(s) on behalf of an entity, paper applications are required. You may obtain account opening forms online in PDF format for all asset classes for the following account types: Roth and Traditional IRA, Sole Proprietorship, Corporation, Partnership, Trust and Limited Liability Company. For these options, you will need to print, sign and mail these forms once completed.

What information do I need to provide to complete an application?

  • All applicants must provide basic identifying information such as name, date of birth, permanent address and, if applicable, valid Social Security or tax ID number.
  • Applicants are also required to provide details of their financial condition and investment experience, such as annual income, total and liquid net worth, years of experience and activity in each asset class.
  • For international clients, please be reminded that a valid passport and address verification dated within the last 60 days are required. Acceptable forms of address verification include, but are not limited to, utility bills, bank or brokerage statements and lease agreements.

What supporting documents are required to establish an entity account such as a Corporation, Limited Liability Company (LLC) or Partnership?

The following documents are required. Please be sure to include all the documents applicable to your firm for all entities that are a part of your firm. For example, a Limited Partnership that has a Limited Liability Company as the general partner must provide all applicable documents for both the Limited Partnership and Limited Liability Company.

Limited Partnership

  • Certified Certificate of Limited Partnership
  • Partnership Agreement
  • Subscription Agreement (if used for investing partners)
  • Private Placement Memorandum (if used in raising capital)

Corporation

  • Certified Articles or Certificate of Incorporation
  • Bylaws
  • Corporate Resolutions reflecting current officers and directors
  • Subscription Agreement (if used for investing stockholders)
  • Private Placement Memorandum (if used in raising capital)

Limited Liability Company

  • Certified Articles Of Organization
  • Operating Agreement
  • Subscription Agreement (if used for investing members)
  • Private Placement Memorandum (if used in raising capital)

Trust

  • First and last page of the Trust

Sole Proprietorship

  • State registration document

What is difference between Joint with Rights of Survivorship (JWROS) and Joint Tenants in Common (JTIC)?

  • Joint Tenants With Rights Of Survivorship (JWROS)

Account type where each account owner has an equal and undivided interest in the cash and securities in the account. Upon the death or declaration of incompetency of any account owners, account ownership passes to the survivor(s).

  • Joint Tenants In Common (JTIC)

Account type where each owner has a percentage interest in the account. Upon the death or declaration of incompetency of any of the account owners, the deceased owner's percentage interest is retained by that owner's estate and is not passed to the surviving tenant(s).

Can I select a Trust to be the beneficiary to my IRA account?

No. However, IRS Publication 590 provides guidance as to how a Trust may be named as a beneficiary if certain requirements are met. Please visit www.irs.gov for more information. If you wish to name a Trust as your beneficiary, TradeStation requires a legal opinion indicating that your Trust meets the requirements outlined in IRS Publication 590.

What documents are required to open a Beneficiary IRA?

The following items are required:

  • Equities IRA Application
  • Decedent’s Death Certificate
  • Most recent Account Statement

Can I trade short in a cash account?

  • No. Trading short is only allowable in margin accounts; therefore, if you are eligible to complete an application online, it is imperative that you apply for margin usage.

Note: All applicants using a paper application, if qualified, will automatically be given margin usage permissions. If you decide that you do not want a margin account, please contact an Account Executive at 800.808.9336.

What does the base Account Services Fee include?

  • The base Account Services Fee includes access to the TradeStation platform and OptionStation.

Note: The Base Account Services fee does not include access to real-time data. For information pertaining to real-time data, please click here.

Am I a Professional or Non-Professional Data Subscriber?

You are deemed a "Non-Professional" Data Subscriber if you meet all of the following requirements:

  • You are either a natural person or a qualifying Trust.
  • You will use the data for your personal investment (non-business).
  • You do not meet any of the requirements for a Professional Data Subscriber noted below.

You are deemed a "Professional" Data Subscriber if you meet any of the following requirements:

  • You are registered or qualified with the SEC, CFTC, any state securities agency, any securities exchange/association or any commodities/futures contract market/association.
  • You are engaged as an investment advisor as defined in the Investment Advisors Act of 1940.
  • You are employed by a bank or other organization exempt from registration under federal and/or state securities law to perform functions that would require you to be so registered or qualified if you were to perform such functions for an organization not so exempt.

General Funding

Please visit http://www.tradestation.com/products/stocks-and-etfs/funding-instructions for funding instructions

General Account Questions

How do I contact TradeStation Securities?

We provide a variety of ways for you to contact TradeStation Securities. Visit the Contact Us page of our website to find contact information for the department that relates to your specific question or concern.

How much will I be charged for monthly access?

For equities accounts, you are charged $99.95 each month for the Account Services Fee, plus fees for any real-time exchanges to which you are subscribed. The Account Services Fee will be waived if you meet the minimum trading criteria in the prior month. The base Account Services Fee does NOT include access to real-time data. When adding exchanges to your account, you will be billed immediately for the entire month, per the exchanges’ billing agreement. If you do not want to be billed the full exchange fee for part of a month, you will need to add your exchanges on the first day of the month. Exchange fees are not pro-ratedand are non-refundable.
http://www.tradestation.com/pricing/software-and-data-pricing
For clients with forex accounts only, there are no fees.

Where can I view my account information online?

Information about your account can be found online in the TradeStation Client Center.

How often is my account information updated online?

Your online account information is updated in real time.

Can I change my user name or password information online? Can I add and change my account features?

Yes. Log into the TradeStation Client Center, simply choose "Change My Information" from the menu to the left. To add or change your account features, simply choose "Change Platform Features" from the menu to the left.
To make changes to your personal information, please call TradeStation Client Services at 800.822.0512 or 954.652.7900 or use our Live Chat service.

Can I link multiple accounts to one login?

Yes. Please contact TradeStation Client Services to request this service.
Can the equity account commission structure be changed from flat fee to per share or vice versa?
Yes. TradeStation will allow you to change the commission structure on your equity account once, as a courtesy.

How do I calculate the commission for an order I want to place?

Please refer to the brokerage commission page on the TradeStation website.

When will I see the proceeds from my sales in my account?

  • Equities – The proceeds from sales in cash accounts will not be available until the settlement date. Stock trades settle three business days from the date of the transaction (T+3). Options trades settle on the next business day (T+1).

How do I receive confirmations?

  • Equities – Confirmations for equities accounts are available on the TradeStation Client Center for 31 days. Confirmations can also be requested to be sent via email or regular mail. There is no charge for electronic confirmations. Equities accounts receiving confirmations sent via regular mail will incur a $1 fee per page.

Does TradeStation send monthly account statements?

  • Equities – Statements for equities accounts are available on the TradeStation Client Center. Statements can also be requested to be sent via email or regular mail. There is no charge for electronic statements. Equities accounts receiving statements sent via regular mail will incur a $1 fee per page.

Does TradeStation Securities provide year-end tax information?

  • Equities – A 1099 is provided to all accounts with activity in the prior year, excluding corporate accounts.

When must I place my platform on hold in order to prevent further billing?

Your access to the TradeStation platform must be placed on hold by the end of the previous month in order to prevent further billing.

If I elect to place the TradeStation platform on hold, can I access my account information on the TradeStation website?

Yes. The Client Services Department can provide you with a login that will allow access to the TradeStation website.

How can I close my account?

To close your account, please contact TradeStation Client Services via phone, chat, email or mail.

Equities Account-Specific Information

What are the account types that TradeStation offers?

TradeStation Securities offers two types of accounts: margin and cash.

Margin Accounts:

  • Day Trade Qualified Accounts (FINRA day trading rules, accounts above $25,000 equity)
  • Non-Day Trade Qualified Accounts (accounts below $25,000 equity, trade restrictions)

Cash Accounts:

  • Day trade rules do not apply to cash accounts and accounts are not restricted to three opening trades/day minus prior four business days’ day trades.
  • Must wait for sale proceeds to settle before they can be reused (three business days for stock, one business day for options)
  • Clients may not sell short in a cash account

Pattern Day Trading Accounts Defined:

Based on FINRA day trading rules, any properly qualified margin account that places four or more day trades within five business days is deemed to be a pattern day trading account.
Pattern day trading accounts must maintain an Account Net Worth (both Beginning Day and Real-time) of at least $25,000 USD. If the Account Net Worth falls below $25,000, trading is restricted to closing transactions only until the account equity is increased above $25,000.

Pattern Day Trading Frequently Asked Questions

What if my Account Net Worth falls below $25,000 and I decide not to re-fund my pattern day trading account but I want to continue trading with TradeStation?

On a one-time basis, you may elect to either:

    • Open a non-pattern day trading margin account. Your account will be limited to no more than three opening transactions per day and no more than three day trades per five rolling business days. For example, if you made two day trades in the preceding four trading days, you will be permitted to place one new opening transaction (buy to open or sell to open) during the current trading day. You are still permitted to place as many closing transactions (sell to close or buy to close) as you would like during the current trading day

    Or

    • Open a cash account. This account will allow you to place unlimited non-margined trades, provided your account has settled funds to place a trade. Remember that the settlement period for a stock sale is T+3 (three business days after trade date) and the settlement period for options sales is T+1 (one business day after trade date).

If my pattern day trading Account Net Worth falls below $25,000, why can’t I just reclassify the account as either a non-pattern day trading or cash account rather than opening a new account?
Once a pattern day trading account is classified as such, we do not permit you to reclassify it as another account type. Any opening transaction in a pattern day trade account could (upon its liquidation) be deemed a "day trade." If we allowed this to happen after the Account Net Worth falls below $25,000, your account would be subject to regulatory restrictions for up to 90 days. You must therefore either re-fund your pattern day trading Account Net Worth above $25,000 to resume trading or open one of the "non-pattern day trading accounts" referenced above.
What if my non-pattern day trading account appreciates above $25,000 in Account Net Worth?
If your non-pattern day trading Account Net Worth appreciates above $25,000, the non-pattern day trading account limitations will still apply.
If you wish to trade without those limitations, you may transfer your equity back to the original pattern day trading account. TradeStation discourages and may elect to restrict excessive transfers between pattern day trading accounts and non-pattern day trading accounts.

General Trading Information

How do I place a trade?

TradeStation Securities provides integrated, direct-access order execution using our intelligent order-routing algorithm. Clients also have the ability to route orders to various market centers to which TradeStation directly connects. Orders can be placed from the Order Bar, Matrix and Market Depth Windows, or using Macros, Hot Keys and automated strategies on the TradeStation platform.

How do I reach the trade desk?

TradeStation Securities has fully staffed trade desks of experienced trading professionals waiting to assist you with any trade-related questions, queries and/or issues.

Equity/Options Desk 800.871.3563

Equities/Options Trading

What kind of short sale inventory does TradeStation Securities offer? What is the process?

Through our securities lending division, TradeStation has built numerous relationships with various broker/dealers. Through these relationships, TradeStation clients have access to a larger-than-normal number of equities for short sale. If an equity is not "easy to borrow," clients may contact the equity trade desk and we will attempt to locate shares for you to short. A trade desk representative will enter your order on the platform. You will then be able to modify/cancel the order yourself. There is no additional charge for this service.

*Short-debit fees are applicable

What kinds of securities will I be able to trade electronically?

As a TradeStation client, you have the ability to trade securities on all listed exchanges (Nasdaq National Market, Nasdaq Small Cap Market, NYSE, NYSE AMEX and NYSE Arca). TradeStation does not support OTCBB and Pink Sheets securities electronically. Orders for OTCBB and Pink Sheets can be called into the equities trade desk and placed at no additional charge.

Can I place multi-leg orders for options?

TradeStation Securities connects and routes to all of the major options exchanges and allows clients to place options orders up to and including four legs.

What are the different levels of options trading approval?

Level 1 – Covered calls, protective puts
Level 2 – Buying calls and puts, collars, covered puts
Level 3 – Stock and index option spreads
Level 4 – Writing naked stock and index option puts (margin accounts), writing cash-covered puts (cash accounts)
Level 5 – Writing naked stock and index option calls (margin accounts)

How many buying power indicators do I have in my margin account(s), and how do they work?

You have three buying power indicators in your margin account(s), which work as follows.

  • "Day Trading Marginable Equities Buying Power"
  • This indicator will ultimately determine new order approval, and therefore will prevent new orders from exceeding this figure.
  • It is capped to the "Beginning Day Trading Marginable Equities Buying Power."
  • It reflects open and filled orders.
  • This indicator acts on a 1:1 ratio for fully marginable securities only; it assumes a 25% margin requirement on the purchase, hence 4:1 leverage.
  • It only replenishes or increases from closing day trades.
  • It will not increase from the liquidation of positions held overnight.
  • "Overnight Marginable Equities Buying Power"
  • This indicator reflects open orders, filled orders and account appreciation and depreciation.
  • It will not prevent you from opening new positions, and therefore is an indicator of a possible margin call if day trades are not closed out before the end of the day.
  • This indicator acts on a 1:1 ratio for fully marginable securities only.
  • Option Buying Power"
  • This indicator is capped to the lesser of 50% overnight buying power and/or 25% day trading buying power.
  • It will determine your options order approval, and therefore prevent options orders from exceeding this figure.
  • This indicator reflects open and filled orders.

How will my buying power be affected when purchasing equity with a higher margin requirement or a leveraged ETF?

Your day trade marginal equities buying power figure is based on the premise that the stock you are purchasing is set to the 25% day trade requirement. Certain equities, for risk-related reasons, may be set at a higher margin requirement (50%, 75%, etc.). Any equity that carries a margin requirement higher than the 25% day trade rate can be found on the Special Margin Requirements page in the TradeStation Client Center. To determine the dollar amount of a security that can be purchased or sold short, you can use the following formula:

Day Trade Buying Power (DTBP) x .25/SMR%

Examples:

  • You wish to purchase SKF, which carries a 75% requirement, and your current DTBP is $200,000. How much SKF can you purchase?

$200,000 x .25/.75 = $66,666
You can purchase up to $66,666 worth of SKF.

  • You wish to short SDS, which carries a 60% requirement, and your current DTBP is $350,000. How much SDS can you sell short?

$350,000 x .25/.60 = $145,833
You can sell short up to $145,833 worth of SDS.

  • You wish to short HGSI, which carries a 75% requirement, and your current DTBP is $300,000. How much HGSI can you sell short?

$300,000 x .25/.75 = $100,000

You can sell short up to $100,000 worth of HGSI.

What happens with my in-the-money options on the last trading day before expiration if I don’t have sufficient equity in the account to support a potential assignment/exercise?

Generally, options contracts that close in-the-money by $.01 or more on the last trading day before expiration will be auto-exercised. You must ensure that sufficient buying power is in the account if you plan on being exercised or assigned. Short option holders do not have any control over when assignments will occur; only the probability of such can be estimated. No options traders can know when stocks will be halted from trading or removed from Ex by Ex-automatic "in-the-money" exercise processing at the Options Clearing Corporation (see its website for memo releases).

If sufficient equity or buying power is not in the account, or if you wish to avoid taking possession of the underlying assets of an options contract that may lead to a highly margined transaction and substantial risk exposure, the options position or strategy may simply be unwound by taking market action before the expiration of trading. TradeStation Securities reserves the right to close out any options position or deny an auto-exercise of such if an account has insufficient equity or buying power to collateralize the resulting transaction. Account owners are responsible for all options-related transactions and financial obligations in their accounts.