What is a Pattern Day Trader and the PDT rule?
Any account that executes 4 or more round-trip trades within any rolling 5 business day period, provided the number of day trades represent at least 6% of the total trading activity during the 5 business day period. This rule became effective September 28, 2001. NASD Rule 2520 (and NYSE Rule 431). Day Trading Margin Requirements: Day Trading (i) The term day trading means the purchasing and selling or the selling and purchasing of the same security on the same day in a margin account except for: a. a long security position held overnight and sold the next day prior to any new purchase of the same security, or b. a short security position held overnight and purchased the next day prior to any new sale of the same security. (ii) The term pattern day trader means any customer who executes four or more day trades within five business days. However, if the number of day trades is 6% or less of total trades for the five business day period, the customer will not be considered a pattern day t
