What if I day trade in an account that is below $25,000 that is coded a Pattern Day Trade Account?
You may day trade in a pattern day trade account up to 1 times cash available on an aggregate basis. For example: Account comes into the day with $20k = cash available Buy 500 shares of DELL at 20 = $10,000 Sell 500 shares of DELL at 20 = $10,000 Buy 400 shares of AAPL at 25 = $10,000 Sell 400 shares of AAPL at 25 = $10,000 The aggregate sum of the buys is $20,000. No trading call was created. However, if the account were to initiate another purchase or short sale (open an additional position) a day trade call would be created in the amount exceeding the cash available amount. Q: If my account is below the $25,000 minimum and I am coded as a Pattern Day Trader, what happens if I liquidate an overnight position and repurchase the same security? How does that affect my buying power? A: Under the new rules, the liquidation of an overnight position will not be counted towards a day trade. For Example: An account with $20,000 equity Day 1: Buy $40,000 CSCO Day 2: Sell $40,000 CSCO Day 2: Bu
