What is a pattern day trader?

You will be considered a pattern day trader if you trade four or more times in five business days and your day-trading activities are greater than six percent of your total trading activity for that same five-day period.

Would I still be considered a pattern day trader if I engage in four or more day trades in one week, then refrain from day trading the next week?

In general, once your account has been coded as a pattern day trader, we will continue to regard you as a pattern day trader even if you do not day trade for a five-day period. This is because we will have a "reasonable belief" that you are a pattern day trader based on your prior trading activities. However, we understand that you may change your trading strategy. You should contact us if you have decided to reduce or cease your day trading activities to discuss the appropriate coding of your account.

What is the minimum equity requirement for a pattern day trader?

The minimum equity requirements on any day in which you trade is $25,000. The required $25,000 must be deposited in the account prior to any day-trading activities and must be maintained at all times.

What happens if the equity in my account falls below the minimum equity requirement?

If the account falls below the $25,000 requirement, you will not be permitted to day trade until you deposit cash or securities in the account to restore the account to the $25,000 minimum equity level.