The Pattern Day Trader (PDT) Rules are regulations set by the U.S. Financial Industry Regulatory Authority (FINRA) to govern the number of day trades an individual can make within a five-business-day period. According to these rules, a “Pattern Day Trader” is someone who executes four or more day trades within five business days.
A Pattern Day Trader must maintain a minimum equity of $25,000 in their brokerage account at all times. If the account falls below this level, trading privileges could be suspended.
The rules generally apply to margin accounts, not cash accounts. (see definitions)
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