Pattern Day Trade Protection

Pattern Day Trade (PDT) Protection alerts you as you place your 2nd, 3rd, and 4th day trades in a 5 trading day period in an effort to help you avoid being flagged as a pattern day trader (PDT).

On the 2nd and 3rd day trades, you’ll be given a few options to help avoid getting flagged.

1. Switch to a non-margin account. A non-margin account isn’t subject to PDT US regulation. This will allow you to continue day trading and participating in the Brokerage cash sweep program.
2. Maintain $25,000 in portfolio value. This won’t prevent a PDT flag, but will enable you to continue day trading if you do get flagged.
3. Monitor your day trades. Placing fewer than 4 day trades in any rolling 5 trading day period will help avoid a PDT flag.

On the 4th day trade, you’ll have to disable PDT Protection in order to proceed with your trade, or take one of the above actions to avoid being marked as a pattern day trader.

If your portfolio value is above $25,000, you will not get alerts for your 2nd and 3rd day trade, even if you have PDT Protection enabled.

To turn Pattern Day Trade Protection on or off:

1. Select Account (person icon) → Menu (3 bars) or Settings (gear)
2. Select Investing
3. Scroll to the Day Trade section and select Day Trade Settings

Pattern Day Trade Protection will consider all the orders you’ve placed,not only orders that have been executed. For example, if you’ve purchased a stock and then set a sell limit order on the same day for the same stock, Pattern Day Trade Protection will count that order as 1 day trade, regardless of whether or not it gets executed. However, if the trade does not execute, it won’t actually count as a day trade for US regulatory purposes.

Also, Pattern Day Trade Protection doesn’t account for orders with multiple executions. If an order you place fills through multiple executions instead of a single fill, you may not receive the Pattern Day Trade Protection warning. Keep this in mind when placing very large orders, or orders on low-volume stocks.

Pattern Day Trade Protection is designed as an added precaution that you can override and move forward with an order.

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