Hello new traders,

Day trading refers to buying then selling or selling short then buying back the same security on the same day.  Interpretation for more complex situations may be subject to interpretation by an individual brokerage firm, for example if you buy the same stock in three trades on the same day, and sell them all in one trade, that can be considered 1 day trade or three day trades.  If you buy stock in one trade and sell the position in three trades, that is generally considered as one day trade if all trades are done on the same day. Three more day trades in the next four business days will subject your account to restrictions (you can only close existing positions or purchase with available cash up front) for 90 days, or until you deposit $25,000 into your account, whichever comes first

 

If you violate the 3 trades in 5 days your account will be subjected to a 90 day suspension. People that are able to have a account above 25k are not capped by the PDT rule. Its frustrating at times but will keep newer traders from over trading. Opening up more accounts will increase your day trades.

 

The other way to avoid it is having a CASH account. Once you reached margin level the PDT rule goes into effect. Some brokers will remove the Margin and turn it into a cash account if you ask. After closing a trade the money that was used needs to settle.  The other issue is unsettled funds have to wait 3 days for them to settle. If you violate spending unsettled funds that is another violation.. This is another reason to have additional accounts.  

 

Suretrader broker is the only known broker that does not honor the PDT rule. However I had them for a few years and by far was displeased with them. Many of the trades that were profitable after their different commission structure went to a loss, this is only my opinion.

 

A day trade is a round trip trade, a buy and a sell on the same day. If you bought  100 shares of UWTI on Monday and sold on the same day Monday this is a Day Trade.

Pre Market and Aftermarket are always counted as a single day it does not run into the next day or as the prior day. SAME DAY MEANS exactly what it says.

 

Now to confuse ya

If your buying in the mourning, midday or late afternoon and ya bought a position. Its doesnt matter what time on the SAME DAY if you sell this is counted as a day trade. This is also known as a round trip.

 

If you buy a stock on Tuesday and then sell on the next day Wednesday this is not a day trade.  Alot of traders do this buy on the day before then sell in the mourning panic.

 

 

I got nailed doing this when I first started trading......errr Flagged as a PDT trader.

If you open a spot on Monday same day then add more to the existing order so you would have two open orders. I bought 300 shares at premarket then around noon bought more another 300 shares. I closed total position sold all the shares. Same day

This was counted as 2 day trades because of the two opening positions.

 

 

Buying 1000 shares, then buying 200 , right before close you buy more 800 shares. This is Wed.

At the open it spikes on Thursday am you sell all of your spot  this is not a day trade since its a new day. 

 

Hope this Helps.