What are the Pattern Day Trading rules that apply to margin accounts?
A day trade is defined as opening and closing the same position on the same day. Margin accounts are allowed to have 3 day trades take place in a rolling 5 day period. A 4th day trade during this period would flag the investor as a Pattern Day Trader. Pattern Day Traders must start each day with at least $25,000 equity. If a Pattern Day Trader account drops below $25,000 no purchases can be made until the account value is brought back up to $25,000. One exception to reset the PDT status is permitted each 90 days. Please click here to see the Day Trader section on the FINRA Website (https://www.finra.org/investors/insights/am-i-pattern-day-trader).