Pattern Day Trade Protection
Pattern Day Trade Protection alerts you when you’ve placed 3 day trades and you’re about to place your 4th. You’ll have the option to proceed with your trade, or cancel it to avoid being marked as a pattern day trader.
Even if you turn off Pattern Day Trade Protection, we’ll still let you know when you’ve placed your 2nd and 3rd day trades in the 5-day window. On your 3rd day trade in the 5-day window, we’ll remind you that you’ll be marked as a pattern day trader if you place 1 more day trade within 5 days of your 1st day trade.
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.