Clarification on IFT transfers and cancellations

[Aitrus]

Note: I'll be using simple numbers because it's easier to type and understand to my poor befuddled mind.

Scenario 1: As I understand it if I make an IFT before noon EST, then I will purchase at that day's COB prices, correct? So, if I take $100 from my G fund, currently priced at $20 (I own 5 shares), and before noon today I transfer to S, currently priced at $25, then I end up at the start of tomorrow's trading day with 4 shares of S. What happens to the value of my money for today? Is today a null day because I'm purchasing?

Scenario 2: I have my 4 shares of $25/share S fund that I purchased yesterday. Today it rises to $30/share. I like what I've earned and I don't think that the market will do well tomorrow, so I IFT to G in the afternoon. But let's say I change my mind. By when do I have to cancel my IFT? And will my 4 shares of $30 S fund rise or fall on tomorrow's market as if I had done nothing?

 

[nnuut]

Note: I'll be using simple numbers because it's easier to type and understand to my poor befuddled mind.

Scenario 1: As I understand it if I make an IFT before noon EST, then I will purchase at that day's COB prices, correct? So, if I take $100 from my G fund, currently priced at $20 (I own 5 shares), and before noon today I transfer to S, currently priced at $25, then I end up at the start of tomorrow's trading day with 4 shares of S. What happens to the value of my money for today? Is today a null day because I'm purchasing?

Scenario 2: I have my 4 shares of $25/share S fund that I purchased yesterday. Today it rises to $30/share. I like what I've earned and I don't think that the market will do well tomorrow, so I IFT to G in the afternoon. But let's say I change my mind. By when do I have to cancel my IFT? And will my 4 shares of $30 S fund rise or fall on tomorrow's market as if I had done nothing?

Scenario 1: You will sell the "G" and buy the "S" at their price at the close of business.

Scenario 2: You have until the 12 noon deadline to cancel your IFT that was made yesterday after the 12 noon deadline, it's just like your IFT after the deadline yesterday never happened, and yes you could gain or lose.

 

[Aitrus]

Scenario 1: You will sell the "G" and buy the "S" at their price at the close of business.

So, I would make the pittance that the G makes that day, then use that to buy 4.xxx shares of S that night. Gotcha.

Scenario 2: You have until the 12 noon deadline to cancel your IFT that was made yesterday after the 12 noon deadline, it's just like your IFT after the deadline yesterday never happened, and yes you could gain or lose.

Hmm...so theoretically I could have 4 shares of $25 S fund, watch it rise to $30, then decide that afternoon to IFT to G thinking that I don't want to lose what I've gained due to market turndown. But, lo and behold, when I check in the morning the market continues to go upward and looks to be staying that way, so I cancel the IFT from the day before and continue to ride the wave (provided it continued to gain), only to IFT out again that afternoon.

So I can have my cake and eat it too? I can check the markets first thing in the morning to see if my IFT from the previous day was a good call or not, then roll the dice on what the rest of the day will bring? Why not repeat this IFT / Cancellation ad nauseaum until my 2 IFTs are used up? Seems like a good way to ride the waves as much as I could while I could.

Will an IFT submission and subsequent cancellation the next morning count against my 2/month limit?

Last question: why do they even have a limit in the first place? To cut down on admin fees?

 

[tsptalk]

I think nnuut was trying to say that you have until noon ET the same morning that you made your IFT, to cancel your pending IFT.

So, any IFT made 12:01 PM ET or later on Friday (after the deadline) can be cancelled by 11:59 AM on Monday.

Any IFT made before 12:00 noon ET on Friday has to be cancelled by 11:59 AM ET on Friday.

I hope that makes sense.

And yes, the reason for the limits, which started in 2008, was because some of us were trading very actively and they looked at us as the enemy. They said we were increasing fees but that really wasn't true, but it put a feather in their cap to tell everyone they were saving the plan money. You can read all about it in some of the older threads in this forum... TSP Transfer Limits

 

[nnuut]

Yeah, what Tom said!:laugh: I think I missed one "what if"?:suspicious:

 

[nnuut]

And there is a good explanation of IFT requirements in the FAQ section on the home page.:cheesy:

[TD="class: top"] When is the deadline for making a transfer ?When is the deadline for making a transfer ?When is the deadline for making a transfer ?
[/TD]

If you want to make a fund transfer, the deadline each day is 12 noon EST. If you complete the transaction before noon EST your new allocation will begin the next morning. If you miss the 12 noon EST deadline your money will be moved the following day. To have a transaction effective on a Monday, you must meet the deadline on Friday at noon.

Per TSP.gov website...
When will you see the effect of an interfund transfer on your account? It depends.

Requests made before 12:00 noon eastern time on a
business day will generally be processed that night using
the share prices for that day. The result can be viewed
online the next day.

Requests made at 12:00 noon or later eastern time will
ordinarily be processed the next business day using that
day’s share prices. The transfer will be reflected in your
account the day after it is processed. For example, requests made late Friday will be processed Monday night using Monday’s share prices, and will be reflected in your account online on Tuesday.
TSP Talk - Frequently Asked Questions

 

[Aitrus]

Thanks for the answers guys. I really appreciate it.

Looks like I have a correct understanding. IFTs that are placed before noon take place at that market day's COB prices, and the money has worked all day before being IFT'd that evening.

IFTs that are placed after noon take place on the next market day's prices, but I have until noon the next market day to cancel the IFT if I so choose. If I cancel an IFT, then it doesn't count against my 2/month limit, and the money works as if I hadn't done a thing.

 

[nnuut]

EXACTLY!