What Is Pattern Day Trader?According to FINRA that abbreviates the Financial Industry Regulatory Authority and which is a government-authorized non-profit organization for overseeing US stock brokers, dealers and rules, you are considered a Pattern Day Trader if you execute four or more trades in five business days, and your trades make up more than 6% of your stock trading account activity within this period. |
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Day Traders are generally classified as Active Day Traders and occasional Day Traders. Group of Self-identified real Day Traders includes investors that are trading actively intraday, and their stock broker is aware that they intend to day trade so that they have to meet the $25,000 minimum account value rule. | |||
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Occasional Day Traders who trade stock a few times intraday without violating the $25K rule, just exploiting the benefit of intraday trading yet in compliance with the rule, not exceeding the limits imposed by the minimum account value requirement.
Pattern Day Trading violators are the investors who Day Trade in violation of the $25K rule without meeting the sufficient capital requirement. These investors' account is subject to restrictions on the first occasion and to suspension if repetitive violation transpires. |
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