If you buy $100 of a security the Net Change in Cash Fund column will show “($100).” The $100 will be removed from your Cash. If you sell $100 of a security, this column will show “$100.” The $100 will be added to your Cash.
If you buy $100 of one security and sell $300 of a second security the Net Change in Cash Fund column will show $200. The $200 will be added to your Cash.
Next to Trade Type you will see whether your order is a window trade or a direct trade. When you make a window trade, your order will always be placed in the window that is open at the time you place your order.
If you want to change your order from a window trade to a direct trade, select Change Preferences. Unlike window trades, we send direct trades immediately to the market for execution, and you will pay a separate commission for each security in a direct trade.
Our Window Trading, often referred to as “a Window”, is an innovative way to fill orders efficiently for long-term investors. Instead of being executed immediately like a Market order (also referred to as a Direct order), Window Trade orders are grouped together by side and symbol one or more times per day and executed. You may submit orders to us throughout the day. The orders are collected until each Window Trade deadline, which occurs one or more times per day. Order processing generally begins soon after each deadline and, once completed, the grouped order can be routed for execution or executed by us in whole or part, depending on the size of the order and other factors (e.g., regulatory or voluntary restrictions that from prohibit us, but not you, from buying or selling a security). The time from the deadline passing to when your order is completed will depend on a variety of factors, including the grouped order size and market conditions. If your order is entered in a Window, it may not be fully executed prior to the start of the next Window. In that event you would not be able to place a subsequent order in the same symbol for the next Window.
You can place only one order per folio in any given Window.
If you have three folios, A, B, and C, you can place one order for each folio in one Window. You cannot place two orders for Folio A in one Window.
Please consult our website for current Window Trade times and frequency.
To execute your Window Trade orders, after grouping orders by side and symbol, we generally send an order (which may be an aggregate of your order and orders of other customers) to a market center for execution. To handle odd lot orders or facilitate fractional shares, we may also execute orders or participate in aggregate orders using our own inventory of securities. All buyers of the same security in a Window receive the same average execution price. Similarly, all sellers of the same security in a Window receive the same average execution price.
You will receive a detailed trade confirmation summarizing the details of each Window Trade order and its execution no later than the day after the day of execution.
Next to Order Type you will see whether you’re placing a dollar-based or a share-based order.
If your order is share based, we will buy or sell the number of shares in your order. If the prices change between the time you place your order and execution, the amount of money you owe or receive may change.
If your order is dollar based, we will buy or sell the dollar amount of your order. If prices change between the time you place your order and execution, the number of shares you buy or sell may change.
If you want to change your order from share-based to dollar-based, select Change Preferences. Direct Trades can only be share-based.
Here’s how the cancel order limit works:
If the value of securities in your buy order goes up by your limit, we will cancel your order. We do not cancel your order if it goes down in value.
If the value of securities in your sell order moves down by your limit, we will cancel your order. We do not cancel your order if it goes up in value.
We separately add up the amount of your buys and sells. We take the greater number and calculate the dollar amount of your cancel order limit.
For instance, if your limit is 5% and you have $1000 of buys and $500 of sells, we take 5% of $1000, and establish $50 as your cancel order limit.
Under that scenario, when the window closes we will add up how much the shares you are buying went up in price and how much the shares you are selling went down. If the final total meets or exceeds $50 we will cancel your order. If you had sells that went up or buys that went down, we will subtract their amounts when we calculate your total.
For example, if your buys went up in price buy $30 and your sells went down in price by $30, your order would be cancelled. This is because the total price movement was $60, which is greater than your $50 limit.
Select the Tax Lot Details button to view the estimated capital gains and losses for the trade you are placing. This button will only appear if you are selling securities.
If you sell a security that you have held for less than one year, your profits are taxed at the “short-term” rate, your personal income tax rate. The current Federal personal income tax rates are 15%, 28%, 31%, 36%, and 39.6%.
If you sell a security held more than one year, your profits are taxed at the “long-term” capital gains rate of 20%.
If you sell security at a capital loss, and in any given year your losses are greater than your gains, you can deduct the losses from your income for tax purposes. A maximum of $3,000 can be deducted each year. Any losses beyond $3,000 can be carried forward and deducted from future yearly income figures.
The holding period begins the day after you buy a security. One year from the beginning of your holding period, long-term capital gains rates go into effect. For example, if you bought 100 shares of security on June 1, 2000, the holding period begins on June 2, 2000. Long-term rates go into effect on June 3, 2001.
If you select the Change Preferences button as you are previewing your order, you may change some of the items that apply when you buy or sell Folios. For instance, among other things, you may change a dollar-based order to a share-based order, a window trade to a direct trade, your tax lot selection method, or your cancel order limit.
When you select the Cancel button, the work you’ve done on your order is erased. You will return to the Accounts page.
If you want to save your order and consider it another day, you may save it to your Watch Account by selecting the Save to Folio Watch button.
If you are creating a Folio and decide you are not ready to buy the Folio, you may save it to your Watch Account by selecting the Save to Folio Watch button.
You may explore your choices and experiment with Folios through your Watch Account. You may buy and sell Folios in your Watch Account without risking real dollars. When you’re ready, you can easily turn a Watch Folio into a Real Folio with real dollars.
You may have up to four Watch Folios and make six window trades a day in your Watch Account. You can track the performance of your Watch Folios and modify them as if they were Real Folios.
When you select Modify Order you go to a page that gives you two more options: Modify Securities and Modify Dollar Amount of Order.
If you select Modify Securities, you will go to a list of securities in your Folio and make trading decisions security-by-security. With modify securities you can
If you select Modify Dollar Amount of Order, you will be given an opportunity to change the overall dollar amount of your order. For example, if you originally entered an order for $10,000, you can easily change it to $12,000. Our computers will remember the weights of your original order and maintain them when spreading your new order amount among the securities in your Folio.
When you are ready to send your order to a market for execution, select Place Order. After you place your order, you will go to a page that displays your order number and provides instructions for viewing the status of the order or canceling the order.
If you select a security’s symbol, a box will appear with information about the security.
A share is one unit of security, but you can buy and sell fractional shares through a window order. For example, if you buy $100 worth of a security with a current price of $80 per share, we will add 1.25 shares to your Folio.
The price per share is the security’s price in the market. The quotes we display are based on a last transaction price that is 20 minutes old and may differ from the current price. Keep in mind that the last transaction may have occurred more than 20 minutes ago.
The total of each buy or sell order is based on the delayed quote at the time you enter your order. The actual execution price may change when the window closes and the order executes.
We calculate the total of each security in your order using six decimal places, but display that amount using only two decimal places. Due to this rounding, the sum of all prices in the Total column may not exactly equal the dollar amount of the order, which is listed at the top of the page.
For example, suppose you entered an order to buy $25 of a Folio that holds six securities in equal weights. Our system would buy $4.166667 of each security. But to display each price, we would round each order to $4.17. If you added the sum of all these rounded prices, you would get $25.02 instead of the actual order amount of $25.00.
(Prior to Rounding)