Why can I not execute more than three day trades in up to five business days?
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To protect our members from the risks of pattern day trading and avoid being flagged as a Day Trader, you can only execute three day trades within a rolling five-business-day period.
Why can I not execute more than three day trades in up to five business days?
To protect our members from the risks of pattern day trading and avoid being flagged as a Day Trader, you can only execute three day trades within a rolling five-business-day period.
A day trade activity involves buying and selling, or selling and then buying back, a security within the same trading day.
Example 1...
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Monday: Buy and sell stock AAA - 2 trades create 1 day trade (Total Day Trades: 1)
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Tuesday: Buy stock AAA - 1 trade (not a day trade, so Total Day Trades remains at: 1)
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Wednesday: Buy and sell stock BBB, buy and sell stock CCC - these 4 trades total 2 day trades (Total Day Trades: 3)
In this scenario, you hit your day trade limit after buying and selling stock CCC on Wednesday.
The next day in which you could buy or sell stock would be the following Monday. As Monday would be 5 business days after the first PDT Violation was made.
Example 2...
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Friday Morning: Buy and sell stock AAA - 2 trades: 1 day trade (Total Day Trades: 1)
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Friday Afternoon: Sell and buy stock AAA - 2 trades: 1 day trade (Total Day Trades: 2)
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Monday: Sell stock AAA - 1 trade (not a day trade, so Total Day Trades remains at: 2)
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Tuesday: Buy and sell stock BBB - 2 trades: 1 day trade (Total Day Trades: 3)
In this scenario, you hit your day trade limit after buying and selling stock BBB on Tuesday.
The next day in which you could buy or sell stock would be the following Friday. As Friday would be 5 business days after the first two PDT Violations were made.
What if I reach my day trade limit?
If you reach the day trade limit of 3 trades in a 5 business day period, you will not be able to place trades until your day trade counter decreases to 2.
How long do I have to wait until my day trade limit resets?
The rolling 5 day trading period is based on when the market is open (typically Monday through Friday, 9:30AM–4PM ET, excluding holidays).
Please refer to “What is a day trade and why is it risky?” to understand why this behaviour is considered extremely risky and is regulated by FINRA.
If you require assistance, please reach out to us via in-app chat or send an email to[email protected]. We would be happy to help.
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