What is a Pattern Day Trader?
A client who day trades 4 or more times in 5 business days within a single margin account.If the day trading activity in a single margin account does not exceed 6% of the client’s total trading activity for the 5-day period, the client would not be considered a “Pattern Day Trader”.If a client qualifies as a Pattern Day Trader in a single margin account, that account will be designated as a Day Trade Margin Account.For Example:If a client does 4 day trades within 5 business days and also has a total of 100 transactions during that 5 day period, they would not be deemed a Pattern Day Trader since less than 6% of that customer’s total trades would have been day trades. In this instance only 4% of the customers trades would be considered day trades.
You will be considered a pattern day trader if you trade 4 or more times in 5 business days and your day-trading activities are greater than 6 percent of your total trading activity for that same five-day period. Your brokerage firm also may designate you as a pattern day trader if it knows or has a reasonable basis to believe that you are a pattern day trader. For example, if the firm provided day trading training to you before opening your account, it could designate you as a pattern day trader.
You will be considered a pattern day trader if you trade 4 or more times in 5 business days and your day-trading activities are greater than 6 percent of your total trading activity for that same five-day period.Your brokerage firm also may designate you as a pattern day trader if it knows or has a reasonable basis to believe that you are a pattern day trader. For example, if the firm provided day trading training to you before opening your account, it could designate you as a pattern day trader.
If you day trade 4 or more times in 5 business days within a single account, you are a Pattern Day Trader. Important: Each executed segment of a sweep order qualifies as a trade for purposes of day trading rules. For example, if your buy market or limit sweep order gets executed in 4 segments, that order actually counts as 4 trades, and will subject you to “pattern day trader” status if you subsequentely sell some or all of the shares the same day.
