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You can begin trading in your Ally Invest account as soon as the funds are clear.
Bank Fed Wires: Clear to trade the same day we receive it.
Bank and Cashier’s Checks: Clear to trade the day we receive it, as long as we can verify the check number and amount with the Bank it's drawn from.
Personal Checks: Clear to trade 3 business days from when the check is deposited.
Transfers: Clear to trade 3 business days from when the funds are deposited.
Other circumstances may apply. See Funds Availability Disclosure
When you open and fund an Ally Invest account, you can trade online the following securities:
Options (equity and index)
ByRDs (Binary Return Derivatives)
Fixed Income (corporate, agency, treasuries, municipals, strips & zeros, CDs, and new issues)
Forex and futures trading information is available through Ally Invest Forex.
Once you fund your Ally Invest Securities account and the deposit clears, you can begin trading. Once you log in, select Quick Trade on the account you’d like to use.
An option trade that contains multiple legs will only be subject to one ticket charge. Therefore, a spread trade of 1 contract per leg will be charged: $4.95 + ($.65+$.65) = $6.25. A spread trade of 5 contracts per leg will be charged $4.95 + ($.65 x 5) + ($.65 x 5) = $11.45. A spread trade of 10 contracts per leg will be charged $4.95 + ($.65 x 10) + ($.65 x 10) = $17.95.
Under Regulation T of the Securities and Exchange Act of 1934, all transactions in a cash account must be paid for in full and are also subject to settlement rules. If you purchase a security with settled funds in your cash account, you may sell that security at any time without restriction. If you purchase a security in your cash account with insufficient funds or unsettled funds, you must hold that security until the purchase is fully paid for with either a new deposit or the settlement date is reached for the funds used. View Unsettled Proceeds Sales Disclosure
Stock trades settle 2 business days following the trade date (T+2) and Option trades settle 1 business day following the trade date (T+1). According to this rule, sale proceeds generated by selling stock in a cash account are considered unsettled for a period of 2 business days following the trade date. You may reuse the unsettled sale proceeds to purchase another security prior to the settlement date of those funds; however, in doing so, you are agreeing in good faith to hold the new purchase at least until the funds from the original sale settle. If you sell the security that was purchased all or in part with unsettled funds prior to those funds settling, it will be considered a violation of SEC rules, and your account will be restricted for a period of 90 days. During that time, you must place your trades over the phone with a live broker.
The original theory for this rule is that a customer who sells securities prior to paying for them in a cash account either with a new deposit or settled funds from a prior sale has received an extension of credit. Credit transactions must be executed in a Margin account. To apply for a Margin account please submit a margin application. There is minimum account equity of $2,000 for a margin account. Margin accounts are subject to Daytrading rules. Ally Invest does not promote daytrading.
We charge a penny per share fee added to the regular $4.95 commission when trading stock valued below $2. View our Commissions and Fees for more detailed information.
Online trading on domestic pink sheet and bulletin board stocks is limited to variable dollar and number of shares amounts. Online trading limits vary depending on the stock, its volume and liquidity.
Yes. Extended hours trading is available at Ally Invest. You may enter pre-market orders between 8:00 am – 9:30 am ET or post-market orders (also called after-hours orders) between 4:00 pm – 5:00 pm ET. On days when the market closes early, the extended hours trading session runs from 1:00 pm – 2:00 pm ET. You may enter limit orders only. An order placed during an extended hours trading session is only good for that session. If your order is not executed during a specific extended hours session, the order expires at the end of the session and does not roll into the next traditional or extended hours session. You may cancel an order that has not been executed before the close of an extended hours session. For settlement and clearing purposes, orders executed during an extended hours session are considered to have been executed during the day's traditional session. Please refer to the additional disclaimer for extended hours trading.
To find out why your account has been restricted, please call us at 1-855-880-2559 or log in to chat.
Under FINRA Regulation T, when a security is purchased, the funds must be received by Ally Invest prior to the sale of that security. If the respective security is sold prior to Ally Invest receiving the appropriate funds, the credit from the sale will not be applied to the account, and the account will be placed on a 90-day restriction. Orders placed in a restricted account will have to be placed through a broker.
A stop order is a market order to buy or sell if a specified, stop price is reached or passed. As soon as the stop price is reached, the order will be sent to the market to be executed. A sell stop price will be below the market, and a buy stop price will be above the market. A stop limit is an order to buy or sell a certain security at a specified price or better, but only after a specified, stop price has been reached. It’s a combination of a stop order and a limit order.
The price of a security, such as a stock, is determined by supply and demand, which, in the stock market, translates into bid and ask prices.
All stock trading in the United States is based on the bid and ask system. The nature of this system is that sell orders are filled at the bid price, which is the highest price that somebody in the market is willing to buy at the security you want to sell, while buy orders are filled at the ask price, which is the lowest price somebody in the market is willing to sell at the security you want to buy.
The difference between the bid and ask price is known as the spread. This is the amount market makers earn per each share on each trade. So, bid is the price one can sell at, ask is the price one can buy at.
The difference between the closing price of one day at 4 pm ET, and the opening price on the following day at 9:30 am ET is due to whatever happened during those hours that may have convinced owners of a particular stock to change their minds about the price they are willing to sell. Also, people who are interested in buying a particular stock may change their minds about what price they are willing to pay for that particular stock.
Open orders can be changed or cancelled. New orders are entered and trades are executed any time except between the 8:30 am and 9:29 am during the pre-market session.
Ally Invest offers many U.S. based mutual funds, load and no-load. Clients have access to thousands of funds through over 500 fund families.
Purchases: $0 (Subject to charges from the mutual fund)
Sale: $0 (Subject to charges from the mutual fund)
A trailing stop order is an order in which the stop trigger price is specified in terms of points or a percentage above or below a security's market price (bid, ask, or last). If the security's price moves in a favorable direction after the order is placed, the stop trigger price will adjust itself automatically.
Ally Invest is charged a local settlement fee of about $50 when trading an over-the-counter foreign stock. Ally Invest passes this fee, in addition to the regular trading commission, to its clients with no mark-up. Over-the-counter foreign stocks are typically represented by a 5-letter symbol ending in F. Foreign companies listed on US exchanges, most commonly ADRs (example: Nokia - NOK, and Sony - SNE) are not subject to this fee. Keep in mind, when you transfer foreign stock into an Ally Invest account, an incoming transfer fee of $50 per position applies.
Ally Invest does not permit opening transactions on these foreign securities ending in the letter F.
You must have a margin account in order to short stock. In order to sell stock short, Ally Invest must first borrow the stock on your behalf and confirm that delivery of the shorted stock will take place. This is referred to as a stock locate. Broker-dealers have a variety of means to borrow stock in order to facilitate stock locates and make good on the delivery of shorted stock. If a stock locate can't be determined, then the stock may be unavailable for shorting.
If a stock locate can't be determined, then the stock may be unavailable for shorting. This is known as a hard-to-borrow security. Some factors that can influence the availability of stock are high demand, small float and increased volatility of the particular security. In some cases, a hard-to-borrow security may be available to sell short, but only for an added fee known as a hard-to-borrow fee or negative rebate.
Hard-to-borrow fees, also known as negative rebate or negative borrow fees, are charged by clearing firms when stock that is sold short is in low supply. Before we go over how the fee is calculated, let's quickly discuss what selling short means and how something becomes hard to borrow.
Short selling involves borrowing shares of stock you don't hold yourself, selling them, and then hopefully buying the shares back later at a lower price. The short seller then returns the borrowed shares to their original owner, having pocketed the difference between selling-high and buying-lower.
Now let's compare short selling in the stock market to a bank. Among other activities, banks make money by taking money deposited in savings accounts and lending that same money out to other customers at a higher interest rate (a loan to buy a house or car, for example). The bank must keep so much capital on hand just in case you decide to close your account and withdraw your money.
A similar balancing act happens in the brokerage world when shorting a stock. Clearing firms who handle most of the back-office operational paperwork for brokerage firms, typically hold all stocks for the margin customers of the brokerage firm. When a trader wants to sell a stock short, the clearing firm lends that person the shares to be able to do that. Much like the banks described above, if a clearing firm is going to lend out the shares, they have to simultaneously make sure they have enough on hand, just in case a person that is long the shares actually wants to sell them.
Each clearing firm only holds so many shares available to borrow for short selling. When the number of shorted shares hits a certain percentage of the total shares a clearing firm holds, the clearing firm may activate policies to make the stock harder to borrow, thus maintaining their own supply. One common policy is the implementation of hard-to-borrow fees. Ally Invest passes these fees at our cost to you, the client.
A hard-to-borrow fee is an annualized fee based on the value of a short position and the hard-to-borrow rate for that position. The fee is charged on a pro-rated basis depending on how many days you hold the position short. It will be assessed to your account daily from settlement through settlement. Finally, if you open and close a short stock position intraday (not held overnight), you will not be subject to a fee.
Please call 1-855-880-2559 with any other questions about hard-to-borrow fees.
Example Calculation of a Hard-to-Borrow Fee:
Current price of stock = $11.00
Number of shares sold short = 10,000
Hard-to-borrow rate = 5%
Current industry convention = 1.02
Keep in mind, the current industry convention percentage set by the securities lending market participants is subject to change.
(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$11.00 x 1.02 = $11.22 = $12.00
(Per share collateral amount) x (share quantity) = Trade value
$12.00 x 10,000 = $120,000
(trade value) x (annual hard-to-borrow rate) = Annual hard-to-borrow fee
$120,000 x 0.05 = $6,000
(annual hard-to-borrow fee) / (360 days) = Daily hard-to-borrow fee
$6,000 / 360 = $16.67 daily hard-to-borrow fee
The hard-to-borrow rate for a security can range from a fraction of a percent to above 100% of the principal value of the trade, depending on how much market demand there is for a specific position. Because demand and the number of shares available to short are constantly changing, it's possible for a stock to go from not having a hard-to-borrow fee to having a hard-to-borrow fee within the same day. For this reason, it is not always possible for Ally Invest to gauge what the exact fee will be in advance.
We do everything in our power to keep clients informed about what the fee will be. That said, selling stock short is risky business, and we can't control the availability of shares out there to borrow. Prior to previewing the trade, clients are required to check the box in order to agree to all hard-to-borrow fees and Reg SHO Rule 204 buy-in obligations.
Keep in mind, hard- to-borrow rates on existing positions fluctuate daily based on supply and demand. Clients will be responsible for any rate increases should they occur. Ally Invest reserves the right to close the position on your behalf without prior notice.
A short stock buy-in and closing trades can occur at any time during the lifecycle of a short position. A buy-in can occur if the stock that has been borrowed is no longer available to be held short. Carrying a short stock position with a negative rate does not protect the position from being bought-in by Ally Invest or our clearing firm at any time without prior notice.
Industry regulators require financial institutions to follow FINRA Rule 2111 on Suitability. Part of this process involves gathering information about your trading experience, financial background (net worth and annual income), and investment objectives. Your investment objective is your overall outlook on trading for your account. We need to have an accurate picture of your goals because we need to be sure the trades you're making are suitable for your situation. Below are brief descriptions of our investment objectives. Should you want to update your account's investment objective, please either send us a signed and dated letter of request with your name, account number, and your new investment objective, or call an Ally Invest representative at 1-855-880-2559. Any requests not made by phone may be faxed to 1-866-699-0563.
Preservation of capital with a primary consideration on current income
Diversification of asset classes for an equal blend of income and long term growth with the primary consideration being current income
Growth and Income
A balance between capital appreciation and current income with the primary consideration being capital appreciation
Long Term Growth with Safety
Long term capital appreciation with relative safety of principal
Long Term Growth with Greater Risk
Long term capital appreciation with greater risk
Maximum total return involving a higher degree of risk through investment in a broad spectrum of securities
Fractional shares of stock will be automatically liquidated when an order to sell the whole number of shares is filled in its entirety. You must close the entire position before the fractional shares will be liquidated. If you have a leftover fractional position and would like to liquidate it, please call us at 1-855-880-2559.
If your fractional shares are liquidated as part of an execution for a whole number of shares, you will receive the same price for the fractional liquidation as you did for the whole number of shares that were executed.
In cases where the whole number of shares are filled in multiple executions at different prices, but are part of the same order you will receive the average price of the whole shares for the fractional share liquidation.
If you liquidate fractional shares only, you will receive the closing price of the stock for the day the request to liquidate was received.
In a situation where a stock is no longer trading, you will need to fill out a Worthless Security/Penny for the Lot form to remove the worthless security from your account. Once you log in, go to More and then choose Forms to download the form. You can fax your completed form to us at 1-866-699-0563, or upload to us once you log in. There is a $30 processing fee. If the security can't be removed as worthless, we'll notify you by email, and no charges will apply. When a security is removed as worthless, it will be processed for a net credit of $0.01. The activity will appear in your Activity and on your account statement. A trade confirm for your tax records will also be generated.
Per Regulation SHO Rule 204, you're considered short the position through settlement (T+3). For example, if on Monday you buy to cover your short position, you'll still be considered short until that Thursday (trade date + 3 days). Our clearing firm must still meet Regulation SHO obligations, so the stock can be bought in through Thursday, which would result in a long position. If this should occur, we'll notify you by email the day the buy in occurs. Visit the U.S. Securities and Exchange Commission for more information.
According to CBOE, VIX was designed to be a consistent, 30-day benchmark of expected market volatility, as measured by SPX option prices. There is only one day in the life of any option that is exactly 30 days to expiration, so in order to arrive at the 30-day standard, VIX is calculated as a weighted average of options expiring on two different dates.
One day each month, on the Wednesday that is 30 days prior to the third Friday of the following calendar month, the SPX options expiring in exactly 30 days account for all of the weight in the VIX calculation. VIX options settle on these Wednesdays in order to facilitate the special opening procedures that establish opening prices for those SPX options used to calculate the exercise settlement value for VIX options.
Options normally trade in increments of $.01, $.05, or $.10, depending on the value of the underlying security.
The penny pilot allows for trading increments of $.01 for bids up to $3 and $.05 for bids above $3, for each of the symbols in the pilot except for QQQ, SPY, and IWM, all of which trade in $.01 increments.
You can exercise your options by calling us 1-855-880-2559 on any day during regular business hours up to 4:15 pm ET. The resulting position will be reflected in your account overnight.
On regular exercise day (the Saturday following the third Friday of each month), equity options and index options with a value of 1 cent or more will be subject to automatic exercise or assignment. On Saturday, your in-the-money options will be removed from your account, and on Sunday, the resulting equity or index position will be reflected in your account.
Keep in mind, if you are holding in-the-money options and you do not have enough equity in your account or you do not hold an off-setting position in the underlying, you will be responsible to cover the resulting long or short position on Monday morning. If your option is in the money but you do not want to be subjected to automatic exercise, please contact us by 4:15 pm ET on the Friday of expiration. If you do not have enough equity in your account to cover an automatic exercise, Ally Invest may at its discretion let the option expire with no exercise, even if it should have been subjected to automatic exercise.
Non-standard options are options that are subject to special settlement due to an underlying company reorganization, stock split, merger or special dividend. Often, non-standard options represent a different deliverable than the usual 100 shares lot. Other times, they may represent the exercise of lots of different securities. Information for individual non-standard options can be found at the Options Clearing Corporation.
These values may be found at CBOE. Keep in mind, the amounts may not be known until late in the afternoon, on the last trading day of expiration week.
If you have positions that are in the money, it's crucial that you monitor your account and communicate with us on expiration. There are a few options if you have positions that are expiring in the money:
- You can close the option position
- You can leave the position open; however, if it's in the money, you must have sufficient buying power in the account to handle the exercise
- You also have the ability to place a Do Not Exercise on long, in the money options. In this case, you will forfeit any remaining premium, but you will not incur the normal risk of taking a position over the weekend. In order to do this, you must call us on option expiration at 1-855-880-2559
Keep in mind, on expiration, we'll monitor and take action on an account if there are not sufficient funds to cover resulting positions. This can include closing out your option positions, entering a do not exercise or closing stock positions in the after-hours market to cover any resulting positions. If you don't want to have your position closed, you must contact us with your intentions with the position, and we'll make our best efforts to comply. Usually, we'll allow clients to take action in their own accounts by 3:00 PM ET if we're alerted in a timely fashion.
If we have to take action above the normal course of action, we do charge a $100 options management charge plus regular commission.
Also, if you are assigned or exercised on positions over the weekend that you don't have funds to cover, we may take action on Monday to close positions.
Unfortunately, Ally Invest does not support autotrade programs at this time. All orders must be placed by the investor as we cannot accept trade instructions from a third party.
Some of the common factors that determine best execution include, but are not limited to: current market conditions, speed of execution, size and type of order, the number of available primary markets for a particular security and volatility.
Yes. Ally Invest honors the national best bid or offer (NBBO on market orders as well as marketable limit orders.
A market center is a place where order executions occur. Even with the current consolidation in this environment, there are hundreds of different market centers that execute orders. These markets vary from physical exchanges with human specialists that hold auctions, to ECNs that electronically match buyers and sellers. These markets all provide prices on individual securities, which then make up the NBBO.
No, even in today's highly electronic environment, not all market centers are automated. Ally Invest attempts to utilize automated markets whenever possible, but there may be circumstances when that isn't possible. Some physical market centers that employ specialists in a manual trading environment still exist. Trading in this type of environment can take several minutes to complete orders.
No. When using Ally Invest to place an order, we place your order over the internet. Ally Invest then decides which market center to route the order to. A similar process occurs when you call us to place a trade.
Ally Invest receives payment for order flow from certain market centers. This payment is used to offset the costs of doing business and ultimately helps to reduce the overall cost to Ally Invest customers. For more information, view our Order Routing and Payment Order Flow Disclosures .
A fast market is a market with excessive volatility, which may reduce the likelihood that you will receive the instantaneous fill report at the price you saw when you entered your order. During this time, executions and confirmations slow down, while reports of prices lag behind actual prices. Fast markets are usually due to events such as news on a specific underlying security or economic announcements that affect the overall market.
A cash account can day trade as often as it wants up to its start of day settled funds. If unsettled funds are used for any part of a purchase, the entire purchase will be subject to Regulation T settlement rules.
For example: You begin the day with $7,000 in your account, however $2,000 of the $7,000 are unsettled funds from recent sales. You're allowed to make as many purchases as you like up to the $5,000 of settled funds in the account, and then turn around and sell those securities the same day. However, any purchases that tap into the $2,000 of unsettled funds in your account must be sold in accordance with the Regulation T settlement rules.
If you would like to trade more frequently, you can consider adding margin to your account. Please review our Margin Trading FAQs to see how trading within a margin account differs from that of a Cash account.
An initial public offering, or IPO, is the first time a company sells its stock to the public. A company may choose to engage in an IPO primarily to raise capital. If the company has never issued equity to the public, it's known as an IPO.
No. Ally Invest does not offer direct access to IPOs. Normally, the only way to receive shares in an IPO allocation is to have an account with an investment bank that is a member of the underwriting syndicate. Even then, shares are usually reserved for their large institutional clients. This is likely the case at all discount brokerages.
While the offering price of the IPO may give some indication, the price may be much different than the price of the IPO, once it begins trading on the secondary market. After a period of market price discovery, a stock will usually establish a trading range and volatility will commonly decrease.
Yes. As a measure to help protect our clients, Ally Invest will only allow limit orders on the day the IPO is expected to begin trading. Because of the inherent volatility of IPOs, market orders will not be accepted, and margin may not be used. Only after the stock has undergone a period of price discovery and exhibits an established trading range will Ally Invest review and, at our discretion, reduce order requirements. IPOs are non-marginable for the first 30 days. Additionally, only cleared funds will be available to purchase recent IPO stocks.
Each exchange has its own process to determine if and when options will be listed to begin trading. In the case of a highly anticipated IPO, this may be as soon as a week, but can be longer.
Yes, but only if shares are available to borrow. In many cases, recent IPOs have a small number of outstanding shares, which can make it difficult for brokerages to locate shares to borrow (especially if it is a highly anticipated IPO). Additionally, borrowed shares may have a high hard to borrow fee, in which case Ally Invest may not accept orders to sell short.
Ally Invest will allow limit orders on the day the IPO is expected to begin trading. Orders would be eligible for execution once the stock begins trading in the secondary market.
Trading on margin involves leverage and allows you to extend your financial reach by investing borrowed funds while limiting how much of your own cash you expend. For this reason, trading on margin carries a higher degree of risk, and losses could exceed the principal invested. Please be sure to review our margin disclosure (PDF) for full details about our policies.
By having a margin account with at least $2,000 in account value, you may bypass the settlement rules cash accounts must follow. However, there may be restrictions to how frequently you can open and close positions in your account on the same day, depending on your account value.
Margin accounts will either have the ability to make day trades on an unlimited basis or they will be limited to a maximum of three day trades within any consecutive five business day period. Determining which rule you can follow depends upon the value of your account and whether or not your account has been labeled as a pattern day trading account.
A day trade occurs when you open and then close the same stock or option position on the same business day. For example, you purchase 100 shares of MSFT at 10 am on Tuesday and then sell 100 shares of MSFT at 3 pm on Tuesday. It is also a day trade if you were to sell short and then buy to cover the same stock in the same day. Finally, any trades executed during the pre- and post-market will also count towards a day trade on the date of execution. Any position held overnight will not be considered as part of a day trade.
Pattern day trading is a coding that is added to any margin account once that account makes more than three day trades within any consecutive five business day period. Once labeled, the pattern day trader account may continue to make day trades only if that account begins the day with $25,000 or more in account equity (stock value + cash). Should a pattern day trading account begin the day under the required $25,000 in account equity, no day trading will be permitted. Should a day trade need to be made, a broker can assist with that trade over the phone.
Keep in mind, placing a day trade while the account is under $25,000 will result in a day trade call being issued for the total amount of the trade and may result in account closure. If you would like to read more about pattern day trading, please review our day trading disclosure (PDF), which also has additional links about day trading.
The easiest way to set up your account for margin is to apply online. Keep in mind, under Federal rules, there is a $2,000 minimum equity requirement to be eligible for margin. If your balance is below $2,000, your account has to be treated as a cash account, even if approved for margin.
You can remove margin by calling us at 1-855-880-2559 or contacting us with online chat with explicit instructions to remove margin.
Keep in mind, if you were labeled as a pattern day trader and removed margin previously, the pattern day trader designation will remain in effect if margin is reinstated on the account.