Green in My Cash Account! | TD Ameritrade Side Hustle Challenge Day 7 transcript

what's up I won all right so here we are today is day 7 in the t v-- ameritrade small account challenge this is my side hustle challenge so this is kind of the account that has been on the back burner I don't focus on it primarily every single day today for instance I had traded in my main account made eight thousand six hundred bucks and then I switched over to TV made one hundred and thirty so you know I didn't I don't always hit the home runs in the TV account mostly because you know when when it's not your primary focus you're gonna naturally focus you know the primary focus will be on the account where it matters the most which is for me the main account is where I make the most money so t v-- ameritrade account kind of the back burner side hustle challenge but six screen day in a row seventh day of the challenge progress is being made I'm averaging one hundred and sixty dollars a day during this recap we're gonna talk a little bit about cash accounts versus margin accounts to talk about settlement periods I'm gonna talk a little bit about options so you guys have questions leave them right down below I hope you're already subscribe the channel if you're not already hit that button I'll see you for the next episode all right stay tuned what's up everyone all right so we're gonna go over day seven I think this is day 7 of my TD Ameritrade small account challenge and I've got another 130 dollars of profit yes the challenge is going a little slower than the challenge that I did with my offshore account that allowed me to trade with leverage and margin with only $500 starting balance t v-- ameritrade there's no leverage and this is a cash-only account which means i couldn't trade yesterday because I had used all my cash the day before and so now today I used I bought nine hundred shares of DTS s and I used up all but a hundred and nineteen dollars of my buying power so that means tomorrow I won't have any cash available to trade I have to wait two days so I have a two day settlement period and that's the same with with anyone it's not special or anything to me it's just I have a cash account so every time you take a trade you've got to wait two days for that cash to settle now there's two ways you can approach this one is that each day you trade with only half of your buying power therefore you could take one trade every day and then the other route is to trade with all of your buying power on one day but you can only trade every other day and the third option would be to use a margin account which means you could actually trade three times in one day but then you wouldn't be able to take any more trades for five days so how does that work well with a margin account they don't they don't make you wait two days four trades to settle it's kind of like the trades still take two days to settle but they know you're good for it so they let you go ahead and trade with that money again on the same day so basically if this was a margin account I would still have three thousand six hundred twenty nine dollars of buying power and I could take trade number two and then I could take trade number three and what happens if i take trade number four my account will get flagged because the margin rule states that if you're gonna trade more than three times in a five-day rolling period that you need to have a minimum of $25,000 in your account and that's obviously not feasible for for most traders most beginner traders and so you can take you know sort of two approaches on it you can either do a $2,500 account like I did or even a $500 account and make it a cash account but then you can only trade three times a week basically three times you know every five days now the advantage of that is on a day like today when you have a stock like DTS s that's really really strong this stock squeezed from under $2 to over $5 a share that's a 100 percent breakout in one day well on the day like this you could potentially trade it multiple times if you wanted to you know you could get in take your profit get out get back in get out and get back in so you could take three trades in one day and potentially grow your account much faster now of course you have to wait five days before those three trades are available again but you could be more selective here was my problem with doing that because I did this challenge about two years ago when I did a different challenge with a retirement account my problem was that since I knew I only had three trades a week I would hesitate because I was like well I've only got three trades a week I don't know if I if this one's worth it and then sometimes I would end up missing a great opportunity and other times I would end up going more than a week without trading because I would say well now my three trades are cleared up I'm waiting for something like this to trade and something like this doesn't happen necessarily every day so then I would have a period of like two weeks where I hadn't traded at all you know so I and that for me was almost too much pressure where's with a cash account I'm like well you know I'll trade in it today and you know I made my hundred thirty bucks yeah I use most of my buying power so I can't trade tomorrow but I'll be able to trade the day after tomorrow so you know I can kind of trade either every day or every other day and that feels a little bit easier and so as a result I've been trading quite a bit more actively than I did when I had my margin account that was below the PDT rule now it's also worth noting that options do settle overnight so I could take my full trade my full cash amount and do an option 1 options trade every day with that full amount and it would settle overnight but trading options you know course is risky we know well hopefully you know there's there's more ways to lose than there are to win and that is to say that you could buy an option contract on you know let's look at the stock like Amazon you know you could buy an option contract on a stock like Amazon let's say you think it's gonna go back up to you know 1865 alright so you buy the 1865 calls and you know you pay whatever whatever those cost and at the end of the day if the stock hasn't gone back up to 1865 but it's still at the same price right here you will lose money you'll lose because of time decay so you can lose not just because you're not right basically even if a stock goes sideways you can still lose because you're losing value on premium so you've got multiple ways to lose and only one way to win and you can even have the stock go back up to 1865 but it took so long to do it that you lost money on the premium and now even though it did what you thought it would do you still lose money right so you know that's kind of one of the challenges with trading options it's it's an extra or it's another sort of burden in terms of the learning curve and I'll just pull up the options change so you can kind of see what it looks like you know pull up Amazon here so let's will pull up the Amazon will do the weeklies right here let's see what's it in the scanner Arcadia Arcadia is back in back in action I traded this one today in my main account over here and look at that squeeze back up nice so Arcadia the halt level is at 6:47 it's like it's maybe squeezing out a few early short sellers just about a million shares of volume here some sellers at 33 there's now 36 on the ask 3831 by 38 3730 in the bid a little bit of selling going through so it's pausing but it's not dropping pausing is always a little sign of weakness and then there's a little bit of a drop so you know we pull up the options chain here so you know we go down Amazon just for instance I mean these these calls are super expensive right now because of earnings coming up but you know you look at this and it's like you've just got this extra barrier you see all all these different strike prices you've got of course the different expiration dates you've got your Greeks and it just adds an additional learning curve it's not really where most beginners are are gonna want to start you know it's it's just not realistic so anyways the easiest way for me to trade this cash account is to just either trade half the cash balance everyday or to trade the full cash balance every other day and that's what I've been doing so here is day seven a hundred and thirty dollars a profit which means in the last seven days I've made a total of about thirteen let's see no eleven eleven hundred and thirty dollars so let's do the math there and let's just see you eleven thirty divided by seven so i'm averaging a hundred and sixty dollars per day when i trade in the account which really isn't bad and i could certainly be trading in it more than i have been if it weren't for you know my desire to also focus on making some some real money in my big account and so sometimes the best quality setups i end up taking in my big account because i know I can take larger share size and you know it's gonna be a bigger win and this account ends up just kind of taking the back burner but despite being on the back burner in seven days this is you know generated some nice profit on our sixty a day so that's about it for me here and tomorrow is the last day of the month and but I will continue to have this small account challenge going and we'll keep trying to grow the account and see where it gets to since it is kind of a backburner project I'll just kind of let it go and can carry into the next month alright so that's it for me and I hope you guys have an awesome day any questions comments on this TV Ameritrade video feel free to leave them down below in the comment section and I will see you guys tomorrow morning check out some build links in my description and if you have questions ask them in the comments I personally respond to every question posted on my channel and don't forget to subscribe [Music]