Pattern Day Trading Rule - NASD Rule 2520 Basic pattern day trader rule summary: An NASD & SEC rule that applies to anyone who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period. A pattern day trader is subject to special rules. The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account. A more complete version is listed here: NASD Rule 2520 What is a day trade?: It is important to understand what is considered a day trade under this rule. A day trade is when you buy and sell the same stock (same symbol) during the same day. This includes if you buy and sell during the pre-market, regular market hours, or in the after-market hours on the same day. A day trade is just a buy and sell (or short sell and buy to cover) of the same stock in one trading day. What is not a day trade?: If you open a stock position one day and hold it overnight and cover it the next day (or any subsequent day), that is an overnight trade. A trade held overnight is not considered a day trade in relation to this rule. There is no limits imposed on overnight trading, you can do this as often as you want. Can I day trade at all with under $25,000?: If you have under $25,000, you can still place day trades through a US broker. However you can only do a maximum of 3 day trades in any 5 consecutive business day period. Once you do that 4th day trade within 5 business days, you become a "pattern day trader" and trigger the $25,000 requirement. It is a rolling 5 business day period, so every business day is part of a 5 day period. Counting day trades clarification: It does not matter whether you buy and sell the same stock or different stocks. Each time you place a buy and sell (or short sell and buy to cover) on the same stock symbol during the same day it always counts as a day trade against the pattern day trader rule. Whether you place day trades on the same day or different days is not relevant.  Example - Same Stock: If you buy and sell 100 shares of the symbol MSFT, that is a day trade. After that you buy and sell 100 shares of MSFT again that day, that is another day trade. You have done 2 day trades. Example - Different Stocks:  If you buy and sell 100 shares of the symbol INTC, that is a day trade. If you then buy and sell 100 shares of CSCO that day, that is another day trade. You have done 2 day trades. Account Type: Margin vs. Cash - You can only do pattern day trading in a margin account. You cannot be a pattern day trader using a cash account. You cannot use a cash account to "get around" this rule. There is no exception to the PDT rule based on account type at all.