What is a pattern day trader?

According to FINRA and the U.S. Securities and Exchange Commission (SEC), a pattern day trader isa person who places four or more day-trades within five business days, if those trades make up more than 6% of their total trades within the same time period. An investor who crosses the PDT line may not have intended to day-trade.

What happens if a broker Flags you as a pattern day trader?

In general, once your account has been flagged by your broker as a pattern day trader, they will continue to regard you as a pattern day trader even if you do not day trade for a while. This is because the firm will have a “reasonable belief” that you are a pattern day trader based on your prior trading activities.

What is a pattern trader account?

A pattern trader account allows investors to trade stocks 4-5 times in 5 days. If the trader crosses the limit, their broker will issue a day trading margin call. This call instructs the trader to deposit money—to meet the minimum PDT requirement.

Who are self-identified day traders & pattern day trading violators?

Self-identified day traders: This includesfolks who are actually day traders, meaning their brokerage is aware that they intend to day trade and that they meet the $25,000 minimum account value requirement. Pattern day trading violators: These are people who day traded in violation of the rules without meeting the sufficient capital requirement.