What is a day trade?
A day trade is the purchase and sale of the same security on the same business day. On Public, day trades only apply to securities held at Apex, such as stocks and ETFs. Crypto, Alts, and Treasuries are not subject to these rules.
What are some examples of a day trade?
Scenario | Day Trade |
Thursday: Buy 50 Bookly Friday: Sell 50 Bookly | No day trades Bought and sold on different business days |
Thursday AM: Buy 50 Bookly Thursday PM: Sell 50 Bookly | 1 day trade Bought and sold on the same business day |
Thursday AM: Buy 20 Bookly Thursday PM: Sell 10 Bookly | 1 day trade Bought and sold on the same business day; doesn’t matter that the quantity was not the same |
Saturday: Buy 20 Bookly Sunday: Sell 10 Bookly | 1 day trade Bought and sold on the same business day, even though two different days |
Thursday AM: Buy 50 Bookly Thursday PM: Sell 25 Bookly Thursday PM: Sell 25 Bookly | 1 day trade Bought and then sold once on the same business day |
Friday AM: Buy 50 Bookly Friday AM: Buy 25 Bookly Friday PM: Sell 25 Bookly | 1 day trade Bought and then sold once on the same business day |
Monday AM: Buy 25 Bookly Monday AM: Sold 25 Bookly Monday PM: Buy 25 Bookly Monday PM: Sold 25 Bookly | 2 day trade Bought and then sold twice on the same business day |
What happens if I day trade?
Pattern day trading rules are defined by FINRA for margin accounts. They do not apply to cash accounts.
Under FINRA regulations, if you are on a margin account, you will be flagged as a pattern day trader (“PDT”) if you make 4 or more day trades within 5 consecutive business days.
If your account is flagged as a PDT and you wish to day trade, you must close the previous business day with at least $25,000 in cash and securities (excl. crypto, alts, treasuries). If you continue to day trade and have less than $25,000 in cash and securities in the previous business day, your account will be set to ‘Sell Only’ for 90 days. This means you can close positions you already own, but cannot open any positions. These rules are set by the regulators and Public Investing is required to follow them.
Your brokerage account, the cash and securities value in your account, may fluctuate above $25,000 at some point during the trading day, but under the regulations, we only take into account the closing balance of the previous trading day.
Where can I find my day trade count and PDT status?
In account settings, tap on Margin Account. If your account is a margin account, you will see your day trade count under ‘Day trading & restrictions’. The day trading count will be replaced with Pattern day trader if your account is flagged as a pattern day trader.
In addition to settings, Public will provide you with warnings during the trading flow if the trade you are attempting could trigger a day trade. You will have the opportunity to exit out of the flow prior to executing the day trade.
If I’m flagged as a pattern day trader, can I do anything?
If you’re unable to maintain a portfolio value above $25,000, you can:
Reach out to Public’s Member Support team to help you do a one-time, courtesy PDT flag removal. They can only do this once during the lifetime of your account, as regulated by FINRA.
Switch to a cash account, since cash accounts aren’t subject to PDT regulation - though there are other limitations for these accounts. Learn more about the difference between margin and cash accounts here.