Eligibility to Start Trading
Before you can start trading, your account must be approved and properly funded for the trading you want to do.
Available funds requirement
To purchase securities, your account must contain available funds equal to or greater than the price of the securities you wish to purchase. If you have more than one open order, you must have sufficient funds in your account to cover the potential execution of all your orders.
Should CFS accept or execute an order for which you do not have sufficient funds in your account, you must immediately deposit enough funds with CFS to cover the debit balance, or your position may be liquidated. (See the Customer Agreement on the Member Forms Directory).
You are responsible for all trades placed in your account.
If you have opened an account at CFS by transferring an account from another brokerage firm, it may take several weeks before the assets arrive at CFS and you can begin trading. Before you begin trading, you should review your Account Balances page (if you transferred in only cash) or your Account Holdings page to see if your transfer has been completed.
CFS requires that stock certificates be in your account and in good deliverable form (properly endorsed, registered, and fully negotiable) prior to the acceptance of a sell order. For further details, please read the Customer Agreement (in the Member Forms Directory). Please also refer to the Customer Agreement prior to placing an order in connection with the sale or transfer of any securities subject to Rule 144 or 145(d) of the Securities Act of 1933.
CFS is bound by the security industry's "know your customer" rule and every account application is reviewed by an authorized principal at CFS. The review process takes place in stages depending on the type of trading you want. Some stages take longer to complete than others and may require you to wait a few more days before you are authorized to begin trading.
If you are opening a cash account, you will usually get a letter telling you your account has been approved for trading in about five business days after we have received your application. Of course, by taking the application to the CFS Service Representative at your local credit union branch, if available, you may be approved immediately.
A margin account allows you to buy securities without full funds in the account
Margin account approval generally takes 6 business days from the time we receive your application. Of course, by taking the application to the CFS Service Representative at your local credit union branch, if available, you may be approved immediately.
In order to start trading on margin, you must have $2,000 in cash and/or marginable securities in your account.
For a more detailed examination of how to use a margin account, please see The Margin Account.
Options trading requires approval on three levels:
To trade Index Spreads, you must have $25,000 minimum in cash and/or marginable securities in your account.
To trade Equity Spreads, you must have $2,000 minimum in cash and/or marginable securities in your account.
Options trading approval can take between 8 to 10 business days from the time we receive your application. Of course, by taking the application to the CFS Service Representative at your local credit union branch, if available, you may be approved quicker.
Buying and Selling Mutual Funds: Understanding Mutual Funds
Looking for a convenient way to invest in a wide portfolio of securities? You might like to learn more about mutual funds. CFS gives you the ability to invest in more than 3,500 mutual funds.
What is a mutual fund?
A mutual fund is an entity that pools the money of many individuals together for the purpose of investing in a diversified portfolio of securities. They are regulated by the Investment Company Act of 1940.
With a mutual fund, you can take advantage of lower risk for individual investors than going it alone in the markets making single trades. You maintain a proportionate ownership in the diversified portfolio of underlying securities in the mutual fund without actually owning any of the individual securities themselves.
The portfolio held by a mutual fund is managed by an investment company. An investment company is an organization that creates and manages any number of vehicles for other companies or individuals to invest money, with the goal of either appreciation or income in the form of dividends.
The investment company appoints a manager whose job it is to see that the fund being managed meets the investment objectives of the fund. The manager uses knowledge of the securities markets, along with investing experience, and adjusts the holdings (or portfolio) of the mutual fund accordingly.
Some funds require that you invest a minimum amount to join the fund.
What's an investment objective?
Mutual funds offer investors a variety of goals, called investment objectives, depending on the fund and its investment charter. For example, the most common objectives are:
Some funds use a combination of objectives.
What about dividend payments?
Mutual funds that pay dividends may pay monthly, quarterly, semi-annually, or annually. Check the prospectus for the fund to find out when dividends are paid and what type of accrual they use.
If you need funds and would like a check sent from your account, please contact the CFS Service Representative at your local credit union branch, if available, or e-mail CFS at firstname.lastname@example.org or call CFS at 1-877-CUSONET (1-877-287-6638), or fax to 1-858-530-4400.
For further information, see Withdrawing Funds from your account.
Non-deposit investment products and services offered through CUSO Financial Services, L.P. (Member FINRA/SIPC) are:
• not NCUA/NCUSIF or otherwise federally insured • not guarantees or obligations of the credit union
• may involve investment risk, may lose value