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I’m receiving emails from my broker telling me that when I sell and then reinvest proceeds in stocks on the same day (before the three day settlement date), I risk being charged interest on my margin account if the sale fails to close on time.

I think sale of shares already in the brokers account is very unlikely to fail. In fact failure of a stock sale to close has never happened to me after hundreds of trades.

I presume the warning is mostly lawyer talk along the lines of please don’t sue us for failure to warn you.

What’s your experience? How often do stock sales fail to close? And why?
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Do you wait for the execution of the sale before buying? I do and I have never had such a warning from any stock broker in 30 years.

Denny Schlesinger
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Thanks, Denny. I haven't been watching for that, but while markets are open most trades fill instantly. I'll take a look. They are all market orders.

I think it has always been true that your are responsible. For some reason they just started sending messages. Its happened to me twice now, but never before for years.
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They are all market orders.

Market orders? I don't think I've ever placed a market order.
Don't you get burned sometimes?

LL
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Unless you are talking about a pretty thinly traded stock, or you are trading a very very large number of shares, I wouldn't worry about it. Just do the math of comparing your order to the average daily volume of the stock in question and you'll see just how insignificant your trade likely is.
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Thanks for your reply.

You're probably right, but I still don't feel comfortable with it.
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