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cash account


Definition
A brokerage account in which the customer is required by Regulation T to pay the full amount due by the settlement date for securities purchased; buying on margin and borrowed money are not permitted. also called special cash account. Some types of accounts, such as Individual Retirement Accounts and Custodian for Minor accounts, must be cash accounts.

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A Warning on FreeridingIf you purchase a security in a cash account, you must pay for it before you can sell it. If you buy and sell a stock before paying for it, you are freeriding, which violates the credit extension prov ... Read more


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