Registered: Feb 2004
Posts: 590

I recently withdrew some money from one of my brokerage accounts which caused it to fall below the 25k minimum for classification as day trading account.

I know that in a NPDT account, I can only conduct 3 day trades in a rolling 5 day period.

However i noticed that after reclassification my buying power remained the same,i.e. 4X buying power, not 2x.

I subsequently used this 4X BP unknowingly to conduct a day trade yesterday.

I am somewhat confused about the rules. Am I prohibited from doing this, will i suffer some kind of margin call?

Can anyone clarify?

Thanks.

Registered: Jun 2009
Posts: 1704

I believe your 4X margin remains the same intra-day just do not get classified as a pattern day trader if you do not have the requisite capital.

Registered: Feb 2011
Posts: 33

In my experience, you can still have 4x buying power in a margin account despite being below $25k. You'll just be subject to the 3 daytrades/5 days rule that you mentioned until your account gets back above $25k.

Sincerely,

Dan @ Cobra

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