Ally Invest Help Center: Trading FAQs | Ally Invest (2024)

Since this error message appears when the cost of the trade exceeds your available buying power, the simplest solution is to make a deposit. You may also want to reduce your share quantity or limit price.

You can check your existing trading funds any time by selectingBalances. Keep in mind that existing open orders also reduce your buying power.

From the Live Dashboard, select the settings icon, choose All Settings, then Account Settings, and then Option Trading Level.

Keep in mind, to access this you'll need to use a desktop instead of a mobile device. Also, after selecting the option level, you'll need to allow 1 to 2 business days for approval.

You can trade the following securities:

Stocks
ETFs
Options (equity and index)
Mutual Funds
Fixed Income (corporate, agency, treasuries, municipals, strips & zeros, CDs, and new issues)

When a reverse stock split occurs, the number of shares you own decreases and the price of the stock increases, but the total value of your holdings stays the same. This action does not dilute or increase the percent of the company you own. A company may take this action to meet a minimum stock price requirement to be listed on a stock exchange.

Learn more about Corporate Actionsand find the latest list of major reverse stock splits. It’s updated every Monday so you can check back each week to see if any impact you.

When a stock split occurs, the number of shares you own increases and the price of the stock decreases, but the total value of your holdings stays the same.

Example
A company offers a 2-for-1 (you get 2 shares for each one you own) or 3-for-1 (you get 3 shares for each one you own) stock split to reduce the price of its stock by increasing the number of shares outstanding.

This action doesn't dilute the percent of the company you own, instead it's used to make the price more attractive to investors, increasing demand and liquidity in the stock.

Learn more about Corporate Actionsand find the latest list of major stock splits. It's updated every Monday so you can check back each week to see if any impact you.

The ticker symbol of the stock you own could change and you’d no longer own that company’s shares once the merger or acquisition is complete.

What this means for you depends on the company’s agreement:

You could receive stock for the other company.
You’ll receive shares for the new company to replace the shares you owned.

A new ticker symbol could be created for the newly-merged company.
You’ll receive a pre-determined number of shares of the new company for each share you owned of the old one. After the merger is complete, the new ticker symbol and share count is reflected in your Ally Invest account.

Cash is part of the merger or acquisition agreement.
You may also receive cash for the shares you owned, plus shares of the acquiring company or the newly-merged company. That cash will be automatically deposited in to your Ally Invest account the day the merger/acquisition is complete.

What else you should know
Sometimes you may be unable to trade shares of companies involved in a merger or acquisition the day the announcement is made. You may also be unable to trade the new company’s shares on the day the merger is completed or goes into effect.

Learn more about Corporate Actions and find the latest list of major mergers and acquisitions. It’s updated every Monday so you can check back each week to see if any impact you.

If your fractional shares are liquidated as part of an execution for a whole number of shares, you will receive the same price for the fractional liquidation as you did for the whole number of shares that were executed.

In cases where the whole number of shares are filled in multiple executions at different prices, but are part of the same order you will receive the average price of the whole shares for the fractional share liquidation.

If you liquidate fractional shares only, you will receive the closing price of the stock for the day the request to liquidate was received.

If you have positions that are in the money, it's crucial that you monitor your account and communicate with us on expiration. There are a few options if you have positions that are expiring in the money:

• You can close the option position
• You can leave the position open; however, if it's in the money, you must have sufficient buying power in the account to handle the exercise
• You also have the ability to place a Do Not Exercise on long, in the money options. In this case, you will forfeit any remaining premium, but you will not incur the normal risk of taking a position over the weekend. In order to do this, you must call us on option expiration at 1-855-880-2559

Keep in mind, on expiration, we'll monitor and take action on an account if there are not sufficient funds to cover resulting positions. This can include closing out your option positions, entering a do not exercise or closing stock positions in the after-hours market to cover any resulting positions. If you don't want to have your position closed, you must contact us with your intentions with the position, and we'll make our best efforts to comply. Usually, we'll allow clients to take action in their own accounts by 3:00 PM ET if we're alerted in a timely fashion.

If we have to take action above the normal course of action, we do charge a $100 options management charge plus regular commission.

Also, if you are assigned or exercised on positions over the weekend that you don't have funds to cover, we may take action on Monday to close positions.

If you're expecting to receive a dividend soon, or one has recently been paid, the amount will have a “D” icon next to your symbol in the Holdings section on your account dashboard.

If you're on a mobile device, select your investment account, then go to Holdings.

You can also find dividend payments in Activity.

Per Regulation SHO Rule 204, you're considered short the position through settlement (T+2). For example, if on Monday you buy to cover your short position, you'll still be considered short until that Wednesday (trade date + 2 days). Our clearing firm must still meet Regulation SHO obligations, so the stock can be bought in through Wednesday, which would result in a long position. If this should occur, we'll notify you by email the day the buy in occurs. Visit the U .S. Securities and Exchange Commission for more information.

These values can be found on Cboe Global Markets, Inc.'s website .Keep in mind, you may not know the amounts until late in the afternoon on the last trading day of expiration week.

Non-standard options are options that are subject to special settlement due to an underlying company reorganization, stock split, merger or special dividend. Often, non-standard options represent a different deliverable than the usual 100 shares lot. Other times, they may represent the exercise of lots of different securities.Information for individual non-standard options can be found at the Options Clearing Corporation .

A hard-to-borrow fee is an annualized fee based on the value of a short position and the hard-to-borrow rate for that position. The fee is charged on a pro-rated basis depending on how many days you hold the position short. It will be assessed to your account daily from settlement through settlement. Finally, if you open and close a short stock position intraday (not held overnight), you will not be subject to a fee.

Please call 1-855-880-2559 with any other questions about hard-to-borrow fees.

Example Calculation of a Hard-to-Borrow Fee:
Current price of stock = $11.00
Number of shares sold short = 10,000
Hard-to-borrow rate = 5%
Current industry convention = 1.02

Keep in mind, the current industry convention percentage set by the securities lending market participants is subject to change.

(market price of stock) x (1.02) = Per share collateral amount (rounded up to the nearest dollar)
$11.00 x 1.02 = $11.22 = $12.00

(Per share collateral amount) x (share quantity) = Trade value
$12.00 x 10,000 = $120,000

(trade value) x (annual hard-to-borrow rate) = Annual hard-to-borrow fee
$120,000 x 0.05 = $6,000

(annual hard-to-borrow fee) / (360 days) = Daily hard-to-borrow fee
$6,000 / 360 = $16.67 daily hard-to-borrow fee

Options normally trade in increments of $.01, $.05, or $.10, depending on the value of the underlying security.

The penny pilot allows for trading increments of $.01 for bids up to $3 and $.05 for bids above $3, for each of the symbols in the pilot except for QQQ, SPY, and IWM, all of which trade in $.01 increments.

Yes. You can gift shares to charitable organizations using a taxable account, such as an entity, trust, individual, or joint account.

To gift shares from a taxable account:

• Complete a DTC Free Delivery Request form. Do not complete the "trade date" or "settlement date" fields, as you're not selling the shares
• Have the form notarized, then send it back to us following the instructions on the form
• There's a $25 fee per position, and processing time is generally 3-5 business days

Keep in mind: You can't gift shares through IRA accounts, and you can't make a charitable gift of shares to individuals.

This is a distribution of a portion of a company’s profits to its shareholders. The payment is typically made in cash, and paid regularly (usually quarterly) to shareholders as of a certain date (the ex-dividend date).

Learn more about Corporate Actions and find the latest list of major dividends. It’s updated every Monday so you can check back each week to see if any impact you.

ACH Transfers

If you transferred from another Ally account, you can use the funds to trade immediately. If you transferred from another institution, there’s a 3-business-day hold on initial transfers.

Wires

Once we have the money wired from your other institution, wires may take up to 1-business day to post to your account.

Checks

If you mail us a personal check, there’s a 3-business-day hold from when we receive it.

Cashier's Checks

If you mail us a cashier’s check, the funds are available to trade as soon as we receive the check.

The price of a security, such as a stock, is determined by supply and demand, which, in the stock market, translates into bid and ask prices.

The nature of this system is that sell orders are filled at the bid price, which is the highest price that somebody in the market is willing to buy at the security you want to sell, while buy orders are filled at the ask price, which is the lowest price somebody in the market is willing to sell at the security you want to buy.

The difference between the bid and ask price is known as the spread. This is the amount market makers earn per each share on each trade. So, bid is the price one can sell at, ask is the price one can buy at

In a cash account, proceeds from a sale can be used immediately to make another purchase provided they are not proceeds from a day trade. Proceeds from a day trade can’t be used to make another purchase until the following trading day. Anything purchased with unsettled funds can’t be sold until settlement of the trade that generated those funds.

If you sell a position purchased with unsettled funds before those funds have settled, you may be in violation of Reg T and subject to a freeride restriction. Stock trades take 2 business days to settle (Trade Date + 2 business days), options trades take 1 business day to settle (Trade Date + 1 business day). If needed, you can still sell a position purchased with unsettled funds prior to settlement and accept the freeride restriction. Alternately, you can deposit additional funds to fully pay for the new position in order to sell it before settlement and avoid the freeride.

Ally Invest is charged a local settlement fee of about $50 when trading an over-the-counter foreign stock. Ally Invest passes this fee, in addition to the regular trading commission, to its clients with no mark-up. Over-the-counter foreign stocks are typically represented by a 5-letter symbol ending in F. Foreign companies listed on US exchanges, most commonly ADRs (example: Nokia - NOK, and Sony - SNE) are not subject to this fee. Keep in mind, when you transfer foreign stock into an Ally Invest account, an incoming transfer fee of $50 per position applies.

Ally Invest does not permit opening transactions on these foreign securities ending in the letter F.