The $25,000 account-value minimum is a start-of-day value, calculated using the previous trading day's closing prices on positions held overnight. ![]() What if an account is Flagged as a Pattern Day Trader?Ī pattern day trader's account must maintain a day trading minimum equity of $25,000 on any day on which day trading occurs. So, an account can make up to three Day Trades in any five business day period without consequence but if a fourth (or more) are executed the account is designated (“Flagged”) as a Pattern Day Trader. Just purchasing a security, without selling it later that same day, would not be considered a Day Trade.įINRA provides that a Pattern Day Trader (“PDT”) is any margin account that executes four or more Day Trades within any rolling five business day period. This definition encompasses any security, including options. ![]() The Pattern Day Trading rules were enacted by FINRA to require that minimum levels of equity be deposited and maintained in Day Trading accounts.įINRA rules define a Day Trade as the purchase and sale, or the sale and purchase, of the same security on the same day (regular and extended hours) in a margin account.
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