What is pattern day trader rule (PDT)?

Pattern Day Trader Rule (PDT) Explained - Warrior Trading Pattern Day Trader rule is a designation from the SEC that is given to traders who make four or more day trades in their account over a five-day period.

What if I'm flagged as a pattern day trader?

If you execute four or more round trips within five business days, you will be flagged as a pattern day trader. Here’s where you might be dinged: If you’re flagged as a pattern day trader and you have less than $25,000 in your account, you could be restricted from opening new positions. So, what now?

What is an example of a day trader rule?

The following are a couple of examples: Mike goes long AT&T $17.27 on Monday at 9 AM. He sees the stock dropped precipitously and gets out at $15.96 at 11:30 AM during the same session. This counts as a day trade in the pattern day trader rule. Susan decides to short Facebook on Monday at 10:30 AM.

How much cash should a pattern day trader hold?

Although both groups have mandatory minimum assets that must be held in their margin accounts, a pattern day trader must hold at least $25,000 in their account. That amount need not necessarily be cash; it can be a combination of cash and eligible securities.