According to regulation, you would be considered a pattern day trader if you execute four or more day-trades within 5 business days in a margin account. If you are designated as a pattern day trader, you are required to maintain a minimum account value, inclusive of margin loans, of $25,000. If your account value drops below $25,000, your account may face further restrictions (see PDT calls).
What is a day trade?
A day trade occurs when you buy and sell the same symbol in a margin account on the same day. If you execute more than 1 day trade within 5 business days, you’ll see a warning before placing the trade to remind you how many day trades you’ve placed.
|Scenario||Number of Day Trades|
Day 1: Buy 100 ABC
Day 2: Sell 100 ABC
|Day 1: Buy 100 ABC, Sell 100 ABC||1|
|Day 1: Buy 100 ABC, Sell 50 ABC||1|
|Day 1: Buy 100 ABC, Sell 50 ABC, Buy 50 ABC, Sell 50 ABC||2|