Pattern Day Trade Protection | Robinhood

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 cash account. A cash account isn’t subject to PDT regulation. This will allow you to continue day trading and participating in the Stock Lending and Brokerage cash sweep programs.
  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. Keep in mind crypto does not count towards the $25,000 requirement.
  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.

Keep in mind

Even if PDT Protection is disabled, we’ll still alert you before you place your 4th day trade in the 5 trading day window.

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 AccountMenu (3 bars) or Settings (gear)
  2. Select Investing
  3. Scroll to the Day Trade section and select Day Trade Settings
Note

Pattern Day Trade Protection is simply a helpful warning, and it can’t guarantee the prevention of partial executions or day trades.

Multiple executions and pending orders

Pattern Day Trade Protection will consider all the orders you’ve placed–not only orders that’ve 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 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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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

© 2024 Robinhood. All rights reserved.