Freeriding

{
  "id": "MLC-T-FIN-000175",
  "term": "Freeriding",
  "field": "Finance and investing",
  "definition": "In a cash account, an investor must pay for the purchase of a security before selling it. If an investor buys and sells a security before paying for it, the investor is “freeriding” which is not permitted under the Federal Reserve Board’s Regulation T and may require the investor’s broker to “freeze” the investor’s cash account for 90 days. During this 90-day period, an investor may still purchase securities with the cash account, but the investor must fully pay for any purchase on the date of the trade.",
  "references": [
    "SEC Investor.gov Glossary"
  ],
  "url": "https://mlchart.com/terminology/finance/freeriding/"
}