When is an Account Considered a Pattern Day Trading Account?
An account is considered a Pattern Day Trading Account if it has more than three Day Trades in five business days. Industry regulations require that pattern Day Traders must maintain a minimum of $25,000 of margin equity. Accounts that have less than $25,000 of margin equity will be issued zero Day Trading Buying Power (DTBP) on the date the call is issued. In other words, if the account ends the session with equity of less than $25,000, it will have zero day trading buying power the following day. There will be no changes to Overnight Buying Power (ONBP). Buying power for Pattern Day Traders is limited to two (2) times their margin maintenance excess for equities and one time for options. Cross guarantees among accounts are prohibited. Day Trading Calls are incurred when an account holder exceeds his or her Day Trading Buying Power at any point during a trading session.NBP).
