Margin Trading...
Day Trading Margin Requirements/NASD Pattern Day Trading Rules
Effective September 28, 2001, the National Association of Securities Dealers (NASD) enacted changes to day-trading margin requirements, which may affect your account.
The NASD provides that a pattern day trader is any account that executes four or more round-trip day trades within any rolling five-business-day period. Day trading is the practice of purchasing and selling, or short selling and purchasing to cover, the same security (equities or options) in the same trading day within a margin account.
What is a day trade/round trip?
A day trade occurs when you buy and sell (or sell and buy) the same stock or option position during the same trading day. A trading day includes all pre-market, normal trading hours, and extended session hours. Selling a position held overnight and reacquiring the position the following day is not considered a day trade.
The NASD provides that a pattern day trader is any account that executes four or more round-trip day trades within any rolling five-business-day period, provided the number of day trades represents at least 6% of the total trading activity during the same five-business-day period.
What is a pattern day trader or a pattern day trading account?
Any margin account that executes four or more day trades/round trips within a rolling five business days has shown a pattern of day trading. The account will be flagged as a pattern day trading account and subject to the National Association of Securities Dealers (NASD) Pattern Day Trading Rules. Day trade buying power is only displayed if your account has been flagged as a pattern day trader.
Hope this info helps...
G-max
In the middle of every difficulty lies opportunity.
-Albert Einstein
