Definition
A pattern day trader makes four or more day trades (buying and selling the same security same day) within five business days, where day trades exceed 6% of total trades. PDT rules require maintaining $25,000 minimum equity in margin accounts. Violations can restrict trading to cash-only for 90 days.
Example
With a $15,000 account, you make 4 day trades in a week. You're flagged as PDT and cannot day trade until equity reaches $25,000.
FAQ
What is Pattern Day Trader?
A trader who executes 4+ day trades within 5 business days.
Why is Pattern Day Trader important?
Pattern Day Trader helps investors evaluate trading mechanics and make more informed decisions.