Pattern day trader (PDT) rule
Definition · Level 0 · Market basics
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A US rule that required a margin account making four or more day trades in five business days to hold at least $25,000 of equity. It is being replaced by intraday margin: in force since 4 June 2026, phased in by brokers until 20 October 2027.
Example
The UK and the EU have no such rule: their brokers set their own limits for frequent trading.
Rules and market figures change: check the current ones before relying on this.
Where Tradecraft teaches it
Level 0 · Market basics, in the lesson “Margin & leverage”: Borrowing from your broker to buy more, and what happens when the price falls.
Related terms
- Account equityWhat you would keep after selling everything in the account and repaying the loan: market value minus what you owe.
- Buying powerHow much you can buy right now given your equity and account type: settled cash in a cash account; in a Reg T margin account, up to 2× excess equity…
- Cash accountA brokerage account where every purchase is paid in full with your own settled money: no borrowing, no short selling, and reusing unsettled sale…
- LeverageControlling more exposure than the money you put up, usually by borrowing, or by using derivatives such as options.
- Maintenance marginThe minimum equity you must keep, as a percentage of a margined position’s market value: at least 25% on longs under the US industry rules (FINRA)…
- Margin accountA brokerage account in which the broker lends against your securities, at interest, so you can buy more than your cash covers and sell short; bound…