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Online trading has inherent risk due to system response and access times that may vary due to market conditions, system performance, and other factors. An investor should understand these and additional risks before trading. Carefully consider the investment objectives, risks, charges and expenses before investing. All investments involve risk and losses may exceed the principal invested. Past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Firstrade is a discount broker that provides self-directed investors with brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice.
Options trading involves risk and is not suitable for all investors. Options trading privileges are subject to Firstrade review and approval. Please review the Characteristics and Risks of Standardized Options brochure before you begin trading options.
ETF trading involves risks. Before investing in an ETF, be sure to carefully consider the fund's objectives, risks, charges, and expenses. Please read the prospectus carefully before investing. Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. ETF Information and Disclosure.
Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. A mutual fund or ETF prospectus contains this and other information and can be obtained by emailing service@firstrade.com.
Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Margin Disclosure Statement, Margin Agreement, and FINRA Investor Information. These disclosures contain information on our lending policies, interest charges, and the risks associated with margin accounts.
Online trades are $0 for stocks, ETFs, options and mutual funds. See our Pricing page for detailed pricing of all security types offered at Firstrade. All prices listed are subject to change without notice.
Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security.
This is not an offer or solicitation in any jurisdiction where Firstrade is not authorized to conduct securities transaction.
System response and access times may vary due to market conditions, system performance, and other factors.
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FAQs
If the customer sells 200 shares at a loss but has bought the same security within 30 days before or 30 days after the sell, then the sale is a wash sale. If the buy was for 100 shares, only the loss on 100 of the 200 share sale is disallowed and applied to the replacement shares.
What is substantially similar rule? ›
An additive will be included within the definition of a "substantially similar" fuel if the additive contains carbon, hydrogen, and any or all of the following elements: oxygen, nitrogen, and sulfur, such that the total additive content other than hydrocarbon: aliphatic alcohols and aliphatic ethers comprises no more ...
Are spy and voo substantially identical? ›
SPY and VOO are both ETFs that track the S&P 500 index, but with some differences in expenses, returns, and trading volume. VOO has a lower expense ratio, making it the better choice for long-term investors looking to minimize costs.
Can you sell and then rebuy the same stock? ›
A wash sale is not illegal—there is no wording that states you cannot sell a security and purchase a substantially similar one 30 days before or after the sale. The rule only makes it so you can't claim a loss on the sale in that year's tax filing.
What are substantially identical bonds? ›
Generally, respective bonds are `substantially identical,' within the meaning of section 118(a) of the Code, if they are not substantially different in any material feature (unaffected by any related material feature, or as affected by such other feature or features), or because of differences in several material ...
What is a substantially similar wash sale? ›
Q: How does the wash sale rule work? If you sell a security at a loss and buy the same or a substantially identical security within 30 calendar days before or after the sale, you won't be able to take a loss for that security on your current-year tax return.
What does substantially similar mean legally? ›
Substantial similarity is the term used by all courts to describe, once copying has been established, the threshold where that copying wrongfully appropriates the plaintiff's protected expression.
Are SPY and QQQ substantially identical? ›
Therefore, selling SPY, QQQ, SPX, or NQX in your retail trading account and buying any of the five funds you mentioned in your 401k plan would not trigger a wash sale, as they are not considered substantially identical securities. Great, one last question.
Is AAPL substantially identical to QQQ? ›
QQQ, because the great majority of its components can nullify AAPL, would not be considered a “substantially identical security.” Even though AAPL comprises 11.59% of QQQ (as of the date of this writing), it can still move up while AAPL is moving down.
How do day traders avoid wash sales? ›
To avoid a wash sale, the investor can wait more than 30 days from the sale to purchase an identical or substantially identical investment or invest in exchange-traded or mutual funds with similar investments to the one sold.
Note: Wash sales are in scope only if reported on Form 1099-B or on a brokerage or mutual fund statement. Click here for an explanation. A wash sale is the sale of securities at a loss and the acquisition of same (substantially identical) securities within 30 days of sale date (before or after).
Is it illegal to keep buying and selling the same stock? ›
Just as how long you have to wait to sell a stock after buying it, there is no legal limit on the number of times you can buy and sell the same stock in one day. Again, though, your broker may impose restrictions based on your account type, available capital, and regulatory rules regarding 'Pattern Day Traders'.
What is the 3-5-7 rule in trading? ›
The 3–5–7 rule in trading is a risk management principle that suggests allocating a certain percentage of your trading capital to different trades based on their risk levels. Here's how it typically works: 3% Rule: This suggests risking no more than 3% of your trading capital on any single trade.
What does substantively identical mean? ›
Substantially identical means that a model is only a variation of a model listed in clause (1)(a), with minor modifications or enhancements including, but not limited to, a folding or retractable stock, a stock of different composition, an adjustable sight, a case deflector for left-handed shooters, a shorter barrel, a ...
How do you count days to avoid a wash sale? ›
Keep in mind that the wash sale rule goes into effect 30 days before and after the sale, so you have a 61-day window to avoid buying the same stock.
Are ETFs substantially identical? ›
If the ETF you're selling and the ETF you're thinking of buying both tracks the same index, that's an indication that the IRS may deem the securities too similar. By inference, 2 ETFs, each tracking a different index, are likely not substantially identical.
What does substantially the same terms mean? ›
Substantially the same terms means that loan proceeds and other financing sources remain sufficient to cover immediate capital needs and, in comparison to the terms put forth in the original application, the debt service coverage ratio does not decrease by more than 0.05%, the amortization and term (maturity) of ...
What is substantially similar position? ›
Definition. Substantially similar work refers to several different aspects of a job. It fits the definition if it involves using similar skills and effort. You also should have similar responsibilities and working conditions.
What is a substantially similar vehicle? ›
Substantially similar vehicle means a vehicle of the same make, model, year and condition, including all major options of the insured vehicle.
What does substantially the same form mean? ›
This phrase is generally used to describe something that is nearly the same as something else but with slight differences. For example, a recipe may be reproduced "in substantially the form" of the original, but with a few minor adjustments. similar (60)
