Restrictions on buying and selling stocks: Pattern Day Trader

Pattern Day Trader (PDT) is an important term in the stock market. The Financial Industry Regulatory Authority (FINRA) in the United States uses it to identify an investor who makes four or more day trades within a five-business-day period, regardless of the ticker.

A day trade is any same-day buy-and-sell of the same stock. Trades across different stocks all count toward the same limit.

Once an account is classified as PDT, same-day buying and selling activity becomes restricted.

Warnings and restrictions

To help you avoid having your account restricted, you'll see different alerts in the app:

• Caution warning: If you've made one or two day trades across any stocks within the last four business days, you'll see a warning. We'll recommend waiting until after 7:00 p.m. CST or the next business day before placing another trade.
• Restriction warning before confirming a trade: If you've already made three day trades and the one you're about to make would be the fourth, you'll see a warning explaining that this trade will restrict your account from buying and selling any stocks.
• Preventive block: If you've already made 3 day trades, you won't be able to make a fourth. As a precaution, we'll block your trades for 24 hours.

What happens if my account is restricted?

If you make four day trades within a five-business-day period, your account will be flagged as PDT and restrictions will be applied immediately. You'll need to contact the support team to request that your account be unlocked so you can trade again.

Remember that your account can only be unlocked once. If it becomes restricted again, you'll still be able to buy and sell normally, but you won't be able to make additional same-day buy-and-sell trades.