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Pattern Day Trader

Trading Term

A Pattern Day Trader is someone who executes 4 or more day trades within a 5 business day period in an IBKR Lite or Pro margin account. Pattern Day Traders must maintain at least USD 25,000 in their margin account.

A day trade occurs when a position in a security (including stocks, ETFs, stock and index options, warrants, T-bills, or bonds) is opened and closed within the same trading day in a margin account.

Key restrictions:

  • Accounts with less than USD 25,000 are limited to 3-day trades in a rolling 5 business day period
  • The rule applies to both U.S. and non-U.S. residents whose accounts are carried by IB LLC or IB UK
  • The rule applies to both U.S. and non-U.S. securities
  • Futures contracts, options on futures, and Forex are not subject to PDT rules
  • Cash accounts are not subject to Pattern Day Trading rules

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