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The PDT rule requires traders seeking to day trade more than three times in a rolling five-day period to keep a minimum balance of $25,000 in their margin accounts.
If an account falls below the $25,000 threshold, the trader is no longer able to execute any day trades until he/she backs up the account above that level.
- Who uses a margin account; and
- Who executes four or more “day trades” within five business days in a margin account; and
This rule assumes that traders with over $25,000 in account equity are familiar with the accepted the risks that day trading entails. Traders found breaking the PDT rule will be unable to daytrade for 90 Days.
PDT restriction only applies for MARGIN account types.
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