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If you transferred from another Ally account, you can use the funds to trade immediately. If you transferred from another institution, there’s a 3-business-day hold on initial transfers.
Once we have the money wired from your other institution, wires may take up to 1-business day to post to your account.
If you mail us a personal check, there’s a 3-business-day hold from when we receive it.
If you mail us a cashier’s check, the funds are available to trade as soon as we receive the check.
You can trade the following securities:
Options (equity and index)
Fixed Income (corporate, agency, treasuries, municipals, strips & zeros, CDs, and new issues)
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.
We don’t charge commissions on any options trades, but there’s a 50¢ per option contract fee charged.
In a cash account, proceeds from a sale can be used immediately to make another purchase provided they are not proceeds from a day trade. Proceeds from a day trade can’t be used to make another purchase until the following trading day. Anything purchased with unsettled funds can’t be sold until settlement of the trade that generated those funds.
If you sell a position purchased with unsettled funds before those funds have settled, you may be in violation of Reg T and subject to a freeride restriction. Stock trades take 2 business days to settle (Trade Date + 2 business days), options trades take 1 business day to settle (Trade Date + 1 business day). If needed, you can still sell a position purchased with unsettled funds prior to settlement and accept the freeride restriction. Alternately, you can deposit additional funds to fully pay for the new position in order to sell it before settlement and avoid the freeride.
We charge a $4.95 base commission and a penny per share when trading stock valued below $2. The maximum commission generally doesn’t exceed 5% of the trade value. View our Commissions and Fees for more detailed information. We also require a minimum opening purchase of $100 per order on OTCBB and Pink Sheet stocks.
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.
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.
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
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)
Yes. For execution of certain single listed index options, we pass through exchange fees of $.35 per contract, in addition to the regular commission.
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 need to have a margin account, funded with at least $2,000, to sell stock short. Once you’ve met those requirements, you’re all set to place your short sell from the Trade Ticket. Need more help? Call us at 1-855-880-2559. We’re available every day, 7 am-10 pm ET.
The availability of stocks that can be sold short varies depending on several factors, including high demand, small float and increased volatility of the particular security. This makes them known as hard-to-borrow securities. 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.
This is an annualized fee charged by clearing firms when you’re holding a short position on a hard-to-borrow security.
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 changing, it's possible for a stock to constantly 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 work 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, you’re 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. You’ll be responsible for any rate increases should they occur. Ally Invest reserves the right to close the position 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.
When you select an investment objective, it helps us understand the primary strategy and purpose for your account.
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+2). For example, if on Monday you buy to cover your short position, you'll still be considered short until that Wednesday (trade date + 2 days). Our clearing firm must still meet Regulation SHO obligations, so the stock can be bought in through Wednesday, 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.
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.
We place your order on your behalf and decide which market center to route the order to.
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.
You can use a cash account to day trade as often as you want up to the start-of-day settled funds in the account. If you use unsettled funds for any part of a purchase, the entire purchase is subject to Regulation T settlement rules.
If you would like to trade more frequently, you can consider adding margin to your account. 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.
No. Ally Invest doesn’t 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.
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.
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’s 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.