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 within 5 business days. Otherwise, the account's day trading buying power will be frozen for 90 days or until the margin call is met.


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