Pattern Day Trader Rule Explained

[@rockwelltradingservices]

Did this clear up the Pattern Day Trader Rule for you? What other topics would you like to see me do a video on? Let me know down in the comments below. Links and videos in this episode: Wheel Playlist: kzbin.info/aero/PLBa3sAx-Io2mybLLdWtbjTFqK9-BR5SJb Trading Taxes Explained: kzbin.info/www/bejne/opKwpYhpgKutias Cash Covered vs Naked Puts: kzbin.info/www/bejne/l4a5qGx-jtd5fKc PowerX Strategy on Kindle: www.amazon.com/PowerX-Strategy-Stocks-Options-Minutes-ebook/dp/B0879CQHBF/ref=sr_1_2?dchild=1&keywords=powerx+strategy&qid=1605733874&sr=8-2 How to manage a trade that's in trouble: kzbin.info/www/bejne/fWfXgX6Xr5Vmh9E

[@legionreaver]

So basically the rule is in place to prevent people with smaller accounts from running up margins that they can't back up by defaulting them to a cash only account. Which really isn't that much of an impairment if you are good at earning trades you should be up to 25k in a relatively short time. Is this correct?

[@bufsabres2007]

Does it work the other way to count a day trade? Closing a position and reopening it?

[@JohnSmith-xm1zz]

@@bufsabres2007 no, that does not count. This guy is a horrible teacher by only giving "some information". He is dnagerous. I 'm not listening to him. He already got 2 things wroing in his video.

[@desidac]

Great short video on an important subject for someone who is trading daily. I did not know about this rule and because of your informative video I do. Thanks Markus! Des

[@rockwelltradingservices]

Hi desidac, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@KpxUrz5745]

Yes this was helpful. A better explanation than I have seen in other videos. Thanks.

[@rockwelltradingservices]

Awesome! :)

[@tvs3497]

Good, I finally learned what pattern day trading rule is for. I have accounts at eTrade, TD Ameri, Robinhood (soon to be closed) so I was up against it in one of these.

[@JohnSmith-xm1zz]

ok so Persuant to your words in your video (words have specific meaning and are precise), a Day Trade is a trade placed from open bell to Close (9:00am-4:00pm). Pre market and post market don't count. Great Thank You for telling me this. You say this rule only applies to Stocks & Options, so it doesn't apply to EFT's at all ever. Great! Thanks for clearing this up for me.

[@rockwelltradingservices]

We are glad that this helps. Watch Markus's upcoming live stream here kzbin.info/www/bejne/m4nLmoaYhrOKq8k

[@belaghoulashi]

Good explanation, good stuff. I've subscribed.

[@rockwelltradingservices]

Hi belaghoulashi, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@seanntomas3815]

Thank you sir. Great info.

[@rockwelltradingservices]

Hi Seann Tomas, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@raghavannatarajan532]

Thank you Mr.Markus. This was really helpful.

[@rockwelltradingservices]

Hi Raghavan Natarajan, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@kjsciacca]

Very well explained. Thanks Markus

[@rockwelltradingservices]

Thank you! :)

[@luismanuelmendoza789]

Look, I took this from IBKR “We have created algorithms to prevent small accounts from being flagged as day trading accounts, to avoid triggering the 90 day freeze. We implement this by prohibiting the 4th opening transaction within 5 days if the account has less than 25,000 USD in equity.” It wont let you make the 4th daytrade so you dont get flagged!

[@showandshare9743]

It's about time we get rid of the PDT rule. We're not babies, we can make our own decision. Time to let poor people day trade too.

[@mgritzke3936]

Very helpful and clear.

[@rockwelltradingservices]

Awesome! Join out Christmas Calendar challenge here rockwelltrading.com/holiday

[@vevasam]

Thanks Markus. As always it was very helpful :)

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@Gardening357]

Good video I have a question $25,000 in cash account or In margin account? Thank you

[@mitchell061675]

Thank you very much,!!!!

[@rockwelltradingservices]

Thank you for watching!

[@alicethumbi]

Thank you sir!

[@rockwelltradingservices]

Hi Alice Thumbi, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍

[@bharani9947]

Pdt rule is applicable for ES mini options?!!

[@rockwelltradingservices]

Key Points about the PDT Rule: 1. Definition: The PDT rule states that if you execute four or more day trades within a rolling five-business-day period in a margin account, you are classified as a Pattern Day Trader. 2. Minimum Equity Requirement: If classified as a PDT, you must maintain a minimum equity balance of $25,000 in your account. 3. Day Trading: Day trading involves buying and selling the same security on the same day. This applies to E-mini options as well. Conclusion: Yes, the PDT rule is applicable to E-mini options if you are trading them in a margin account and meet the criteria for day trading. If you exceed the day trading limit without maintaining the required equity, your broker may restrict your trading activity.

[@bharani9947]

Thank you so much...god bless you brother.

[@rockwelltradingservices]

I am glad that this helps!

[@GurlalDhillon1]

when they say have 25k is that cash just sitting there or it can be stocks worth 25k?

[@brianking1815]

What if your a cash only account to start with, you do not have a margin account. Does the PDT rule apply ?

[@Vug6r]

So it gets resetted after 5 days right?

[@mitchell061675]

Does the $25,000 have to be in your individual account or does that count your options that you executed as well?

[@rockwelltradingservices]

Good question! The $25,000 typically refers to the equity in your individual account. Options you’ve executed would count toward that total as long as their value is part of your account's equity. It's always worth double-checking with your broker to be sure!

[@tshepolesufi2978]

Guys I am new to trading I have a question I trade volatility index and I trade multiple times a day not as a scalper so does PDT apply to also volatility indexes not sure if vix is forex or options

[@rockwelltradingservices]

If you are trading volatility indices through a platform that does not classify them as stocks or options (such as a forex or CFD broker), the PDT rule likely does not apply. However, always verify with your broker to understand the specific regulations and requirements for your trading activities.

[@spmirhs]

What if I WANT to day trade and have less than 25,000. Is it okay to be flagged as a pattern day trader and continue trading with 10k? Is the only limitations that you lose the ability of margin?

[@SarthakJoshi-d9v]

hello sir how long I can allowed to hold pattern day trading contract

[@rockwelltradingservices]

If you make four or more day trades within five business days, you are classified as a Pattern Day Trader. To continue day trading, you need to maintain a minimum account balance of $25,000. If your balance drops below this amount, there may be restrictions on your trading. Make sure to understand these rules and seek advice from your broker or financial advisor for personalized guidance.

[@SarthakJoshi-d9v]

@@rockwelltradingservices if I am not wrong I can allowed to hold margin position as much as I like to hold ya

[@SarthakJoshi-d9v]

@@rockwelltradingservices is it true I can allowed to hold my margin position as long as I like ya

[@SarthakJoshi-d9v]

@@rockwelltradingservices if I am not wrong I can allowed to hold Margin position as much as I like ya [ I mean to say that I can allowed to hold margin position 1 year , 2 year or 3 year ya this is my choice ya]

[@mtz9939]

Very helpful

[@rockwelltradingservices]

😊Awesome! I am glad that this helps!

[@pichetudomprasert621]

If I 've got one Flag signal by accidentially , how long is that flag signal will be eliminated ?

[@rockwelltradingservices]

It will take 5 trading days. If you got it accidentally, you should be fine. 👍

[@beatsbyrover3756]

If im at day 3 of 3 in day trades, can I ONLY sell on the 4th day?

[@beatsbyrover3756]

Or will i be flagged

[@Vug6r]

Did you find the answer

[@rajeshbudarapu4313]

Sell and buy on same day ,how many trading

[@rockwelltradingservices]

Thank you for watching!

[@travel_passion01]

If I maintain minimum 25000 in my margin account after buying all stocks in a day then still 4 day rule will applicable ?

[@atrianaatriana5457]

Thanks

[@swing_trades_setups]

If you have over $25,000 in your account and you are listed as day trader is it true that some brokerages actually give you more margin?

[@PederE007]

Why are there Pattern Day Trader Rules? Who or what are they trying to protect?

[@joeybez5464]

WHAT IS THE BEST WAY TO TRADE FOR $? OPTIONS ? STOCKS? CRYPTO?

[@rockwelltradingservices]

Markus right now recommends trading options, it is more profitable in the current market climate. Would you like to learn how he trades options?

[@joeybez5464]

@@rockwelltradingservices PRICE?

[@rockwelltradingservices]

We have a free playlist here kzbin.info/www/bejne/jn6nZp6Aa5d3a7c

[@joeybez5464]

@@rockwelltradingservices THANKS

[@rockwelltradingservices]

You are welcome! :) By the way, you may want to get a copy of Markus's free audiobook here rockwell.info/YTAudiobook

[@Diablue13]

Good Vid thank you.

[@rockwelltradingservices]

Thank you! :)

[@sabriath]

There's other ways to avoid the PDT rule....by covering the position with a different asset. For example, if you bought a Call and it suddenly becomes very valuable, you can sell a higher strike Call against it and turn it into a spread, you take some money off the table without getting a PDT hit....and the spread hypothetically will retain some value so you can close it the following day if you want to. There are other examples, but I'm not going to teach all of my methods and give away my secrets.

[@zo9fg]

Teach us, pdt is dumb

[@JuanitaaHarris-x1l]

Lewis Steven Rodriguez Edward Thompson Michael

[@donaufetzen]

Ein Haarschnitt und eine Rasur waere in Ordnung.

[@rockwelltradingservices]

I love my hair as it is. ;)