The reason your cash account is restricted is because of free riding. As long as you don't sell the same shares the same day (free riding) your account won't get restricted. As soon as you sell shares you could use 100 % of your cash. You don't have to wait to use the cash for more shares. Now you are probably on a 90 day restriction and have to wait for T+3 settlements. They also use the first in first out rule which means if you had 5000shs SDS yesterday and today buy 5000 sds in the morning and then sell 5000 shares later the same day you didn't come under the day pattern trader rule or free riding since you would be selling the shares you owned yesterday first.
Are you putting on big intra-day trades that commit most of your funds and ties them up for the 3-day period? Or big enough trades that after 2 days most of the funds are tied up? Vanguard warns me about free-riding if I sell on the same day but nothing ever happens. However my position sizes are small relative to total funds available as my trades are cleared through the main money market account I hold with them.
Vanguard shows me the funds I have available. I assume that as long as I do not drop below the MMF minimum required balance there will not be an issue, although the way I have seen the rule stated makes it look like it should be interpreted much more strictly.
That may well introduce new headaches and requirements. Per FINRA:
“The rules adopt a new term "pattern day trader," which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. Under the rules, a pattern day trader must maintain minimum equity of $25,000 on any day that the customer day trades. The required minimum equity must be in the account prior to any day-trading activities. If the account falls below the $25,000 requirement, the pattern day trader will not be permitted to day trade until the account is restored to the $25,000 minimum equity level.”
It isn’t totally clear above but I suspect that the transaction settlement process affects this required minimum balance. For example, if one has $30K in the account and then buys and sells $10K worth of securities in the same day, the account is considered to be down to $20K and thus in violation of the minimum equity rules, even though the trader is flat.