What is meant by Pattern Day Trader (PDT)?

Question

Accepted Answer

A Pattern Day Trader is someone who has an IBKR Lite or Pro margin account and who affects 4 or more "day trades" within a 5 business day period. Pattern Day Traders must maintain at least USD 25,000 in their margin account. If your margin account is under USD 25,000 then you are limited to 3 "day trades" in a rolling 5 business day period, but if you use all 3 "day trades" then your account is flagged as a "Potential Pattern Day Trader".

Users may elect to downgrade from a Margin type account to a Cash type account as cash accounts are not subject to Pattern Day Trading.

Please Note

Accounts that have not yet been migrated to the intraday margin standards are still subject to the Pattern Day Trading (PDT) rules and are not yet subject to Intraday Margin Deficit (IMD) calls. For more information on the FINRA rule change please review the FAQs on IMD.
A day trade is when a position in a US or non-US security (Stocks, ETFs, Stock and Index Options, Warrants, T-Bills or Bonds) is increased ("opened") and thereafter decreased ("closed") within the same trading session in a margin account (an exception is made if a long position was held overnight and sold the next day prior to any new sale or if a short position was held overnight and purchased the next day prior to any new sale of the same security).
U.S. residents and Non-U.S. residents whose accounts are carried by IB LLC or IB UK are subject to the Pattern Day Trading Rule.
If you have been flagged as a Pattern Day Trader, you may be eligible to reset your Pattern Day Trader status.
A cash account is not subject to the Pattern Day Trader rules.

Additional Information