What Is the Pattern Day Trader (PDT) Rule? What Changed, What Counts, and What Brokers Still Apply

Most people learn the PDT rule from the restriction email. This is the rule itself and what has replaced it: the three conditions, exactly what counts as a day trade (with the cases that trip people up), what the rule does not cover, and the workarounds — including the one that is not as clever as the forums make it sound. The counter below does the broker's arithmetic so you know before the fourth trade.

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What is the pattern day trader rule?

The pattern day trader rule is the FINRA regulation that has applied to US margin accounts: if you make four or more day trades within five business days, and those day trades are more than 6% of your total trades in that window, you are flagged as a pattern day trader and must keep at least $25,000 of equity in the account to keep day trading. Below $25,000 the broker restricts you to closing positions only — usually for 90 days, or until you deposit enough to cross the line.

FINRA Regulatory Notice 26-10 replaced the rule in its entirety — the day-trade count that designates a pattern day trader and the $25,000 minimum equity requirement — with intraday margin standards under FINRA Rule 4210, effective 4 June 2026: firms now monitor and manage intraday margin deficits instead of counting day trades. Brokers may delay the switch until 20 October 2027, so until yours confirms it has moved, the limits described below may still apply to your account — check your broker.

It is the single most-searched rule in US retail trading and the most misunderstood, because most people learn it from the restriction email rather than from the rule itself. This page is the rule, what counts, what does not, the legitimate ways around it, and the one workaround that is not as clever as it sounds.

What are the three conditions that trigger the PDT flag?

The graphic in this guide puts the old rule next to what replaced it. Under the old rule — still applied by brokers that have not switched — there were three gates you had to pass through to be flagged:

◆ Diagram · the PDT rule then and now · three gates vs intraday margin

1. Four or more day trades in any rolling five-business-day window. Not a calendar week — any five consecutive trading days.
2. In a margin account. Cash accounts are outside the rule entirely.
3. Day trades exceeding 6% of total trades in that window. This gate rarely matters in practice; if you made four day trades and sixty swing trades in the week, you are not a pattern day trader.

Pass all three at a broker that still applies the rule and it applies the flag. From then on you need $25,000 of equity — cash plus the marked value of positions, not buying power — at the close of the previous day to make a day trade. If equity is below that and you day trade anyway, the account is set to closing-only until it is topped up.

What counts as a day trade?

A day trade is opening and closing the same position in the same security on the same trading day. The strip illustration in this guide covers the cases that cause confusion:

◆ Diagram · what counts as a day trade · five scenarios

• Buy in the morning, sell in the afternoon — counts.
• Buy today, sell tomorrow — does not count, however short the hold.
• Buy 100 shares, sell 50, sell 50, same day — one day trade, not two. The count is per round trip of the opening position.
• Short then cover the same day — counts.
• Options: buy a call, sell it the same day — counts; options are securities under the rule.
• Buy 100, buy 100 more, sell 200 — one day trade.
• Buy 100, sell 100, buy 100, sell 100 — two day trades.

Pre-market and after-hours trades are part of the same trading day. A position opened at 9:35 and closed at 4:15 in the extended session is a day trade.

What does the PDT rule not cover?

• Cash accounts. No margin, no PDT rule. The constraint instead is settlement: proceeds from a sale settle the next business day (T+1 since 2024), and using unsettled funds to buy and then sell is a "good faith violation", three of which restrict the account. In practice a cash account lets you day trade with the cash that has settled, which is a different limit, not no limit.
• Futures. Regulated by the CFTC, not FINRA; no PDT rule. Micro contracts make it accessible with small accounts, which is why so many US day traders end up on MES and MNQ.
• Forex and CFDs. Not securities; not covered. CFDs are not available to US retail traders at all.
• Crypto. Not covered. Spot and perpetuals on exchanges have their own rules and none of them is this one.
• Non-US brokers. The rule is FINRA's; a broker outside FINRA's jurisdiction does not apply it, though many international brokers apply it to US persons anyway.

What are the legitimate ways around the PDT rule?

While your broker still applies the rule, these are the options — the tiles illustration in this guide lays them out:

◆ Diagram · ways around the PDT rule · while your broker still applies it

• Cash account. Legitimate. Limit becomes settled cash rather than a trade count; you cannot short, and you cannot use leverage.
• Futures. Legitimate. Different product, different risk profile, and the leverage is real — a micro E-mini contract is $5 per index point.
• Forex. Legitimate for US residents at a CFTC-registered broker; 50:1 leverage cap on majors.
• Deposit $25,000. The rule's own answer. Note the equity has to stay above the line; a losing streak that takes you to $24,900 restores the restriction.
• Multiple brokers. The workaround everyone mentions: three day trades at each of three brokers. It is not illegal, but each account is still a margin account subject to the rule, brokers share data more than people assume, and splitting a small account three ways makes every position tiny. It is a grey area that solves the wrong problem.

The wrong problem, to be blunt: if your edge only exists with fifteen day trades a week on a $8,000 margin account, the rule is protecting you from your own maths. Our position sizing guide has the numbers.

What happens when you are flagged as a pattern day trader?

At a broker that still applies the rule, you get a notice; some give a one-time reset on request, once per lifetime of the account. Until equity is above $25,000, you can close positions but not open new day trades. The flag is per broker, not per person, but it does not expire on its own — a flagged account stays flagged until the broker removes it, which most will not do if you keep meeting the criteria.

Under the old requirements, day-trading buying power for a flagged account above the line is 4× the maintenance margin excess, and a day-trading margin call — from exceeding that buying power — has its own five-day deadline and its own restriction if unmet. The new intraday margin standards replace these day-trading margin requirements too, so brokers that have switched manage intraday margin deficits instead.

Using the counter

The PDT counter on this page takes your trades over the last five business days, marks which ones are day trades, applies the 6% test and tells you whether the next day trade would trigger the flag and how many days until the oldest one rolls off. It is the arithmetic a broker that still applies the rule does; running it yourself before the fourth trade is cheaper than the email.