Pattern Day Trading (PDT)

The "Pattern Day Trading (PDT)" rules were issued by the Financial Industry Regulatory Authority (FINRA) to ensure that a minimum amount of equity must be deposited and maintained in day trading accounts. This rule only applies to customers residing outside the European Econmic Area (EEA).

What is a Day trade?

FINRA rules define a day trade as the purchase and sale or short sale and purchase of the same security on the same day (regular and extended trading hours) on a margin account. This definition covers any security, including options. Simply buying a security without selling it later that day would not be considered a day trade.

These products, which you trade via your securities sub-account, are affected by day trading rules:

The following products are not traded via the securities sub-account and are therefore not subject to the restrictions:

What is a Pattern Day Trader?

A Pattern Day Trader is any customer who uses a margin account to execute four or more day trades within five business days. An account can make up to three day trades in a five business day period without any consequences. If you execute a fourth (or more) day trade within the mentioned period, the account will be marked as a Pattern Day Trader. If an account is marked as PDT, the marking remains on the account for 90 calendar days.

In order to operate Day Trading freely, your account must have a Net Liquidation Value (NLV) of at least USD 25,000. The Net Liquidation Value is calculated as the P&L of cash, stocks, options and futures (TWS: Equity with loan). A cash account is also exempt from the rules.

My margin account is classified as a PDT account, what can I do?

To prevent your margin account from being blocked due to PDT restrictions for day trading, the system has algorithms to prevent a fourth day trade if the PDT requirements are not met.

If your account or NLV falls below $25,000 USD during the day and you have executed more than three day trades, your account will automatically be marked PDT and blocked for the next 90 days for day trades. The PDT rules are also applied retroactively to the 4 previous trading days.

Please note that you will still be able to close existing positions in the affected account. However, you are not permitted to open new positions.

As a customer, you have the following options to remove the block:


Further information about the pattern day trading rules

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