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Why did spending the sale the same day still lose money?
The sale is real the moment it fills. The cash from it follows the settlement cycle. Spending that cash on a second buy, when the broker allows it, does not make the second buy safe. The second buy can fall.
The short answer
The sale is real the moment it fills. The cash from it follows the settlement cycle. Spending that cash on a second buy, when the broker allows it, does not make the second buy safe. The second buy can fall.
The position
Here is one position (hypothetical, made-up prices). The count is 100 shares. The first figure in the story is $40. The later figure is $31.
| What you are looking at | Count | Price | Value | Versus the first total |
|---|---|---|---|---|
| The first total | 100 shares | $40 | $4,000 | $0 |
| After the price fell | 100 shares | $31 | $3,100 | −$900 |
The bottom row is this account. The −$900 is the gap. The price fell. Holding does not put the first figure back. These figures are made-up, so the subtraction stays checkable after the market moves.
Start with the count. 100 shares at $40 comes to $4,000. The later price is $31. The same count at that price comes to $3,100. Subtract. $4,000 minus $3,100 is $900. That is the whole table. It is not a fee hiding in the price, and it is not a forecast of tomorrow.
How to check it on the statement
Read the count first. Then read the price the statement used. Multiply those two yourself. If your product is not a share, multiply the point move by the contract size instead of multiplying a share price. The number you get should match the value in the table, or you are looking at a different count.
Write the first total on one line and the later total under it. The gap is a subtraction. Do not add a second story, such as a fee or a dividend, until you see that line on the statement. A missing line is a zero, not a guess.
If you sold part of the position, split the page into the cash that left and the count that stayed. Add those two. A sale of one piece does not freeze the price of the piece you kept.
If the order never filled, the statement still shows the old count. Look in the order history for a cancel, an expiry, or a limit the market never traded. The position page will not show an order that died.
Do this before you decide what the market "meant." The dollars are the count times the price you can point at. The reason can wait until those two numbers are written down.
What happened
You sold another holding on Monday for $5,000. The same day the broker let you buy 100 shares at $40 with that money, which is $4,000. Those shares then fell to $31. They are worth $3,100. The Monday sale did settle, on the cycle below. The loss is the second buy, not a missing deposit. You still hold the 100 shares. US stock settlement is T+1 since 2024-05-28. Source: sec.gov. That sentence is the calendar file. When the file changes, the sentence changes. The $40 and $31 prices stay hypothetical.
How to read a brokerage statement shows the count you still have and the price the statement used. It does not replay the order you meant to send. If the statement's count disagrees with this page, use the statement and do the subtraction again.
What this is not
People treat a filled sale as cash they can already withdraw. Withdrawal can wait for settlement even when a new purchase is allowed. This page is the purchase that was allowed, and then the price fell. It is not a fee for trading unsettled funds. If a broker charges one, it is a separate line, and this table does not invent it.
The account does not undo it
A TFSA or an RRSP changes the tax treatment of what is inside. It does not put the first price back. The shelter does not pay the gap back, and a lower price does not hand contribution room back. Room follows the contribution rules, not the chart. A taxable account shows the same mark. The wrapper decides tax. The count and the price decide the dollars.
If the custodian does not allow this product, the custodian's list wins over a general description. The math above is only for a position the account actually holds.
What to write down
- The sale that raised the cash, and that it had not settled yet.
- The second buy's fill.
- The count still held.
- The later price on that count.
Then subtract. If a step is missing, the gap on the screen is not explained yet. Do not fill the blank with a rate, a fee, or a yield you did not read off a statement or a contract spec.
Questions
Is the $5,000 missing? No. That sale follows the settlement cycle. The loss in the table is the second buy, from $40 to $31.
Why could I buy if I could not withdraw? A broker can allow a purchase before it allows a withdrawal. Those are two permissions. This story is the purchase.
Does settlement erase the loss? No. Settlement delivers the cash from the first sale. It does not put the second buy's price back.
Does a TFSA settle faster? No. The shelter does not change the cycle. The shares still fell.
Are these the live prices? No. They are hypothetical, so the −$900 stays checkable.
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