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Trading rules on the US exchanges

Pattern Day Trading ("PDT") Intraday Trading Rules

 FINRA and NYSE have introduced rules for traders working on the NYSE, NASDAQ exchanges, which are designed to limit the number of intraday trading on accounts with a capital of USD 25,000 or less. All of our clients' accounts are insured and supervised by the US government. In order to ensure a comfortable work for traders, our company adheres to all the rules and conditions of the exchanges.

Trading rules

The Pattern Day Trading rule will not apply to accounts with margin collateral (leverage) and the net capital must be at least 25,000 USD.

The rule includes assets that are listed on the US stock exchange (NYSE, NASDAQ, AMEX).
 Stock options.
 Stock futures.

The actions of the Pattern Day Trading rules depend on the citizenship of the trader and in which regional office of our broker his account is opened. Traders in some countries are required to comply with PDT rules, traders in other countries of the world do not need to adhere to PDT rules and there is no restriction on intraday trading on US exchanges. The trader can ask the trader's support about compliance with the PDT rule for his brokerage account.

PDT regulations include

Day trading. Any asset that is traded on the US stock exchange (stocks, stock futures, stock options, bonds) was opened and closed on the same day (trading session).

Pattern Day Trading. Execute 4 or more intraday trades for 5 days. A trader who executes more than 4 trades within a day falls under the PDT rule.

In order to trade intraday, the trading account must have a balance of at least $ 25,000 in Net Liquidation Value. Net Liquidation Value includes cash, stocks, options and futures with profit or loss calculation.

NYSE rules state that if a trader's account with a balance of less than 25,000 USD takes place intraday trading, then the account must be frozen to prevent additional trades within 90 days. Our company has created algorithms to prevent small accounts from entering as an intraday one, in order to avoid the 90-day moratorium.

Accounts that at one time had a balance of more than $ 25,000 and were identified as intraday trading accounts, and then the net liquidation value in the account fell below $ 25,000, may be subject to trading restrictions for 90 days through violation of the PDT rules.

In our company, for client accounts, the automatic function of the impossibility of opening 4 positions in 5 days is activated, so as not to allow our client to fall under the Pattern Day Trading rule, and the client's trading account was not frozen by FINRA.

How to unfreeze an account if it falls under the PDT rule?

The client can do the following:

Fund your trading account to the required minimum of $ 25,000.

Wait for a moratorium period of 90 days.

Request a reset on PDT account.

When a client breaks the intraday trading rule, he will immediately be prohibited from opening any new positions. The client can close all existing positions in his account, but will not be allowed to open any new positions.

How do I reset my PDT account?

FINRA made it possible for brokerage firms to remove the PDT mark from a client's account once every 180 days. After the PDT mark is removed, the customer will again be allowed to make 3 trades in 5 business days.

If Customer's account gets re-tagged PDT within 180 days of the reset, Customer then has the following options:

Fund your trading account to the required minimum of $ 25,000.

Wait a period of 90 days.

Pattern Day Trading