Hi, new to this forum and will save introduction for another time... My question is about daytrades, if you have an account under 25k you can only do 3 daytrades a week, but if you short sell say 500 XYZ at 10 dollars and then buy them back to cover at 8 dollars, AND THEN sell them again in order to get rid of your position (in case it would fall even more), does this count as 1 daytrade or 2, because you have sold them again. I can't believe I couldn't find any info on this... So very simple; short sell, then buy, then sell again in one day, 1 or 2 daytrades?
Sell short and buy to cover (within same trading session) = day trade. From TDA: What is a day trade/round trip? A day trade occurs when you buy and sell (or sell and buy) the same stock or option position during the same trading day. A trading day includes all pre-market, normal trading hours, and extended session hours. Selling a position held overnight and reacquiring the position the following day is not considered a day trade. FINRA provides that a pattern day trader is any account that executes four or more round-trip day trades within any rolling five-business-day period, provided the number of day trades represents at least 6% of the total trading activity during the same five-business-day period. If you are flagged as a pattern day trader, you'll be subject to restrictions, including a minimum equity of $25,000 at the start of any day in which day trading occurs. Pattern day-trader accounts that fall below the $25,000 minimum equity requirement and day trading will be restricted to closing transactions only for 90 days, or until the equity is brought up to $25,000. Edit: I re-read your post and I see you're talking about selling the same stock (or buying to cover??) then selling it again? Not sure exactly why one would do this, unless you're cycling out and expecting it to go down more? I'd recommend a call to your broker to get clarification on your ?
It probably depends on whether your broker allows simultaneous long and short positions in the same stock (ie +100 shares, and also -200 shares). Some do, some don't. If they do, you can (probably) use a single buy order order (rather than a buy-to-cover) to go from a short position to a net long one. If they don't, you'll probably get that buy counted as two trades instead of one.
PDT is most retarded rule out of all of them..makes no sense whatsoever..good job SEC! keep it going.. to OP-first google link http://en.wikipedia.org/wiki/Pattern_day_trader hard,isn't?
ok, now i see how it works, when you short sell a 100 and then buy them back to cover, you just close out you're position, so you just end up with 0 shares, I thought that when you bought them back you had a 100, so what i thought would happen was like when you would short sell a 100 and then buy back 200 then you would have an open position of 100 (which i said i would want to get rid off) sorry for my stupid question, should have just tried it before i asked...