You may receive the order rejection message "Insufficient Cash" or "Insufficient Settled Cash" when you place an order or place a currency conversion. It usually means the funds you need have not yet settled, or they are reserved for other orders. The message most often appears in a "Cash" type account. A "Cash" type account cannot borrow funds or engage in free-riding, so it may be limited to trading with settled funds. When you sell a security or close a position, the proceeds may not be available for a new transaction until the original transaction has fully settled.
Why this happens
You are buying a foreign security or converting currency before funds have settled
To buy a foreign security in a "Cash" type account, you must first convert currency and wait for the conversion to settle. Currency conversions typically settle in T+2 (trade date plus 2 business days), while stock trades typically settle in T+1 (trade date plus 1 business day). This difference can leave you with insufficient settled cash even after you convert currency. Settlement times may vary depending on the currencies and securities involved.
You are using proceeds from a recent sale
Cash from a sale or closed position is not available until that trade settles.
Open orders are reserving funds
Live orders you have placed may reserve funds and reduce your available cash balance.
You are moving proceeds from Securities to Commodities
This applies to both "Margin" and "Cash" type accounts. If you sell or close a position in the Securities segment and try to use the proceeds for a futures or futures option transaction in the Commodities segment, the order may be rejected. In the U.S., securities and commodities transactions are subject to distinct regulation and customer protection rules. These rules require settlement to be completed before proceeds can be transferred between the two segments.
How to resolve it
- Check your available and settled cash. These amounts may differ from your total balance because of open orders or unsettled transactions. Review your account for any open orders.
- Cancel any open orders that are blocking funds. Then place your order or currency conversion again.
- Plan currency conversions ahead. Convert currency before your intended trades. Wait for the conversion to fully settle before you place stock orders or buy a foreign security.
- Wait for funds to settle before you enter the new order.
- Deposit additional funds in the amount needed for the order to be accepted. Please observe credit hold policies, which differ by deposit method.
- Reduce the order size to an amount consistent with your settled funds.
- Consider a "Margin" type account. For securities trades, this may allow trading with unsettled funds. It offers more flexibility but can carry more risk if you borrow funds. It does not remove the settlement requirement for moving proceeds from the Securities segment to the Commodities segment.
Additional Information