Does the “Free Ride” rule always apply to your entire collection of shares in a particular stock?
Your question is unanswerable as you haven't provided enough information. I.e. If those shares cost $1000 and you have $50000 ( or any number above $1000) of cash available in the account then you can't possibly free ride. I think your understanding of the free ride rule is incorrect. Basically what this rule is stating is that you have to have the cash when the trade is placed in order to settle the trade. Otherwise you are taking on margin (which you can't do in a cash account). So at order entry you have to have the cash to cover the purchase so it's able to be settled. If you do, no problem and you can sell that stock before trade settlement. There is no law that says you have to hold it past trade settlement. However, you cannot spend the same dollar more than once before it settles.  This site does a good job explaining this more throughly with examples: http://www.invest-faq.com/articles/trade-day-free-ride.html "You should check with your broker for details, but you can generally specify which ""lot"" you are selling.  where I've seen it, that's done by concurrently sending a ""letter of instruction"" documenting your choice of lot concurrent with the sale, but different brokers may handle this differently.  I would think this should work for the case that you describe. (In addition, the default rule used by your broker is ""probably"" first-in-first-out, which will do what you want here.) Note that this may come into play even in a margin account to the extent that you might want to specify a lot in order to obtain (or set yourself up for later benefit of) favorable tax treatment under the long-term capital gains rules"
why can't I just use the same trick with my own shares to make money on the way    down? Because if you sell shares out of your own portfolio, by definition, you are not selling short at all. If you sell something you own (and deliver it) - then there is no short involved. A short is defined as a net negative position - i.e. you sell shares you do not have. Selling shares you own is selling shares you own - no short involved. You must borrow the shares for a short because in the stock market, you must DELIVER. You can not deliver shares you do not own. The stock market does not work on promises - the person who bought the shares expects ownership of them with all rights that gives them. So you borrow them to deliver them, then return them when you buy them back. http://mobile.nytimes.com/blogs/economix/2014/04/02/the-many-classes-of-google-stock/ Are you counting both class A and other share classes? Is there any precedent for companies trading on their own insider information for the benefit of stockholders?  Said another way, if a company were to enter a new market where they were very confident of their ability to steamroll a public competitor, could they use a wholly-owned special-purpose investment vehicle to short that competitor in order to juice the benefit of that move? You are still selling one investment and buying another - the fact that they are managed by the same company should be irrelevant.  So yes, it would get the same tax treatment as if they were managed by different companies. Reading the plan documentation, yes, that is what it means.  Each purchase by bank debit, whether one-time or automatic, costs $2 plus $0.06 per share; so if you invested $50, you would get slightly less than $48 in stock as a result (depending on the per-share price). Schedule of Fees Purchases – A one-time $15.00 enrollment fee to establish a new     account for a non-shareholder will be deducted from the     purchase amount. – Dividend reinvestment: The Hershey Company pays the     transaction fee and per share* fee on your behalf. – Each optional cash purchase by one-time online bank     debit will entail a transaction fee of $2.00 plus $0.06 per     share* purchased. – Each optional cash purchase by check will entail a     transaction fee of $5.00 plus $0.06 per share* purchased. – If funds are automatically deducted from your checking or     savings account, the transaction fee is $2.00 plus $0.06     per share* purchased. Funds will be withdrawn on the     10th of each month, or the preceding business day if the     10th is not a business day. – Fees will be deducted from the purchase amount. – Returned check and rejected ACH debit fee is $35.00. I'm not 100% sure, but I don't think it would be considered a free ride. The idea of a free ride is that you are engaging in a transaction when you do not actually have the money available to cover it, since the broker is technically giving you a 3 day loan whenever you purchase your stock (3 day rule to settle.) However, if you are using a margin account, and you have enough credit available, then you are not actually using unsettled assets, but rather an additional line of credit which was granted to you. You would just need to make sure that your total transactions are less than your purchasing power. That's my take on it anyway. I hope that helps, and hopefully someone can confirm or reject what I have said. It depends. If the investor bought newly-issued shares or treasury shares, the company gets the money. If the investor bought shares already held by the owner, the owner gets the money. A 100% owner can decide how to structure the sale. Yet, the investor may only be willing to buy shares if the funds increase the company's working capital. Shares are partial ownership of the company. A company can issue (not create) more of the shares it owns at any time, to anyone, at any price -- subject to antitrust and similar regulations. If they wanted to, for example, flat-out give 10% of their retained interest to charity, they could do so. It shouldn't substantially affect the stock's trading for others unless there's a completely irrational demand for shares. Yes, on the settlement the stock is yours to sell with no risk of freeride or day trading applying. "No, assuming by ""public company"" you mean a corporation.  The shareholder's individual liability is limited to their investment.  Your shares can go to zero value, but that's the limit. EDIT In regard to the follow-up question in the comments: ""Are all companies in the stock market corporations?"" the answer is definitely ""no.""  I cannot say much about other countries, but the US markets have some entities which are known as ""master limited partnerships.""  These trade shares on the market by the usual rules, but if you buy you become a partner in the company rather than a shareholder.  You still have limited liability in this case, but there will be differences, for example, in how you're are taxed." You also may want to consider how this interacts with the stepped up basis of estates.  If you never sell the stock and it passes to your heirs with your estate, under current tax law the basis will increase from the purchase price to the market price at the time of transfer.   In a comment, you proposed:   Thinking more deeply though, I am a little skeptical that it's a free lunch: Say I buy stock A (a computer manufacturer) at $100 which I intend to hold long term. It ends up falling to $80 and the robo-advisor sells it for tax loss harvesting, buying stock B (a similar computer manufacturer) as a replacement. So I benefit from realizing those losses. HOWEVER, say both stocks then rise by 50% over 3 years. At this point, selling B gives me more capital gains tax than if I had held A through the losses, since A's rise from 80 back to 100 would have been free for me since I purchased at 100. And then later thought  Although thinking even more (sorry, thinking out loud here), I guess I still come out ahead on taxes since I was able to deduct the $20 loss on A against ordinary income, and while I pay extra capital gains on B, that's a lower tax rate. So the free lunch is $20*[number of shares]*([my tax bracket] - [capital gains rates]) That's true.  And in addition to that, if you never sell B, which continues to rise to $200 (was last at $120 after a 50% increase from $80), the basis steps up to $200 on transfer to your heirs.   Of course, your estate may have to pay a 40% tax on the $200 before transferring the shares to your heirs.  So this isn't exactly a free lunch either.  But you have to pay that 40% tax regardless of the form in which the money is held.  Cash, real estate, stocks, whatever.  Whether you have a large or small capital gain on the stock is irrelevant to the estate tax.   This type of planning may not matter to you personally, but it is another aspect of what wealth management can impact. "Yes.  I heard back from a couple brokerages that gave detailed responses. Specifically: In a Margin account, there are no SEC trade settlement rules, which means there is no risk of any free ride violations. The SEC has a FAQ page on free-riding, which states that it applies specifically to cash accounts. This led me to dig up the text on Regulation T which gives the ""free-riding"" rule in §220.8(c), which is titled ""90 day freeze"". §220.8 is the section on cash accounts. Nothing in the sections on margin accounts mentions such a settlement restriction. From the Wikipedia page on Free Riding, the margin agreement implicitly covers settlement. ""Buying Power"" doesn't seem to be a Regulation T thing, but it's something that the brokerages that I've seen use to state how much purchasing power a client has. Given the response from the brokerage, above, and my reading of Regulation T and the relevant Wikipedia page, proceeds from the sale of any security in a margin account are available immediately for reinvestment. Settlement is covered implicitly by margin; i.e. it doesn't detract from buying power. Additionally, I have personally been making these types of trades over the last year. In a sub-$25K margin account, proceeds are immediately available. The only thing I still have to look out for is running into the day-trading rules." I don't think that you will be able to find a list of every owner for a given stock. There are probably very few people who would know this. One source would be whoever sends out the shareholder meeting mailers.  I suspect that the company itself would know this, the exchange to a lesser extent, and possibly the brokerage houses to a even lesser extent. Consider these resources: Each S-corp is bound by its own plan documents, which typically do not limit or dictate where the investments are held. Your brokerage account has no tie to the company from which the funds come, however, you are still subject to maximum SIMPLE contribution rules and cannot exceed the $12,500 (if under age 50) COMBINED contribution for any and all companies. Be careful about co-mingling from both companies as there are penalties for early withdrawals made within 2-years of participating in the plan. If you started them both at the same time it's not an issue. I just read the article and I'm not sure if the calculation is flawed. When they look at the single stocks. Do they always reinvest the dividends to the same stock? That would be quite unusual behaviour I think.  An investor who uses the buy and hold strategy  might have a bunch of companies which won't exist anymore in 20 or 30 years e.g. coal plants.  While many stocks are a good investment now. Reinvesting all the dividends for decades is obviously a bad decision for a large portion of the stocks.  Maybe I misunderstood the article. But what do you guys think?