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