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A FINRA rule applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin accounts, but not to cash accounts. A pattern day trader is subject to special rules.
If you’re day trading frequently, you’ll be labeled a pattern day trader, and will be forced to have at least $25,000 in equity in your account at all times.
Keep your account balance above the requirement: If you keep your balance above $25,000 at all times, you’ll never risk violating the pattern day trading rule. The Bottom Line
You'll need a minimum of $25,000 in your account to be "pattern day trader" – meaning you have at least four day trades within five business days – by FINRA regulations.
In the United States, based on rules by the Financial Industry Regulatory Authority, people who make more than 3 day trades per 5-trading-day period are termed pattern day traders and are required to maintain $25,000 in equity in their accounts. [6] However, a day trader with the legal minimum of $25,000 in their account can buy $100,000 (4× ...
The SEC requires that pattern day traders (investors who execute four or more day trades in five consecutive business days), maintain a minimum equity of $25,000 in their margin account.
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