Pattern Day Trading

Please be aware that certain trading activity could result in your account being classified as a Pattern Day Trading account. There are two important points to understand with regard to pattern day trading:

  1. How you might become labeled a PDT
  2. What it means to be labeled a PDT

Your account will be labeled PDT if you execute 4 (or more) round-trip day trades within 5 business days provided the number of day trades is more than 6% of your total trades in that account for that same five-day period. You need only meet this criteria one time to become designated a PDT.

Once your account is labeled PDT, you are subject to different requirements and restrictions than a non-pattern day trader. The most significant of these requirements is that your account must maintain at least $25,000 worth of equity.

If you do not meet this minimum, you will receive a margin call to meet the minimum equity requirement, which you must meet. Otherwise, the account's day trading buying power will be frozen for 90 days or until the margin call is met.