Stock trading in an IRA account, even day trading, certainly is acceptable and can be done and you can use 100 Trade Jack as your trading guidance.
Note: Whether you do day trade stock in an IRA is very much a financial decision you need to make with your financial advisor; this is NOT advice.
100 Trade Jack is in fact what I use when trading my IRA, a traditional IRA.
Advantage of Day Trading an IRA
The advantage for me is that I really hate having to report zillions of trades, some of which come out even or close, on my tax return. Makes for an unnecessarily long Schedule D on the 1040.
The thing you have to be careful about is that an IRA, whether traditional or Roth IRA, is going to be a “Cash” account at your brokerage, not a “Margin” account.
The difference between cash and margin can be important if you do not keep an ample reserve of cash in the account and trade too frequently.
With a cash account, you can only trade with “settled” funds. If you sell a stock today, that money is not available to make another trade until the trade settles; typically in three business days. Call your broker to make sure you know the correct rules.
The penalty for violating the trading rules can be that your account is frozen for a period of time, perhaps 90 days.
If you buy a stock today, then sell a stock today, you can probably use those funds, un-settled, to buy another stock but then you cannot sell that second trade until the first trade clears. Just make sure you understand and follow the rules, which you should try to get in writing from the brokerage house you use.
A margin account using non-IRA, non-retirement funds, does not have these limitations.
Advantage of Trading Stock in Roth IRA over Traditional IRA
If you want to trade stock in an IRA, think about a Roth over a Traditional IRA. Presuming you make profits in your stock trading account, which will probably be the case if you use 100 Trade Jack, a Roth IRA is a retirement account where you have paid tax on the money BEFORE putting it in the account. Therefore, drawing money out of the Roth IRA should be tax free after you turn the appropriate age.
A Traditional IRA does not have that advantage. A Traditional IRA will benefit from tax DEFERMENT on your profits, but money taken out will be taxed according to the rules in effect and your tax situation at the time of withdrawal. Who knows how the rules or tax rates could change between then and now.
The Price Of Roth Conversion For Your Trading Account
For me, I have considered Roth conversion several times, but there are costs. First, you have to pay tax now so that the Roth can be withdrawn tax free later. Second, unless you are able to convert your entire account, you then end up with yet-another-financial-account to deal with; i.e. hassle.
So it becomes a very personal matter whether you want to trade stock in a Traditional or Roth IRA with 100 Trade Jack. Jack himself is using his Roth IRA for his stock trading account. While there is never any guarantee he will double his trading account in a given year, the stated goal of 100 Trade Jack is just that – 100% return in a year’s time.
Whether you want to do day trading or just trade stock, you choose whether you trade in an IRA or a normal, perhaps “margin” account. What I do recommend is that you try 100 Trade Jack as your trading guide. If you want to learn more about how 100 Trade Jack works, see our full 100 Trade Jack Review.
100 Trade Jack comes with a 60 day guarantee
