What Is a Pattern Day Trader?

A pattern day trader is a stock trader that engages in same day trading of a security in more than six percent of the transactions that they make. A pattern day trader could also be someone that opens and closes a position on the same security within the course of a day four times over five consecutive trading days. If you plan on trading in this manner you have to abide by the rules of the SEC. This means that you will have to have a minimum of $25,000 in your account and you have to trade in a margin account.

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