Info: Pattern Day Trading rule does not apply to cash accounts!

Discussion in 'Taxes and Accounting' started by earth_imperator, Jul 14, 2022.

  1. I just learned that the infamous "Pattern Day Trading (PDT)" rule (that limits the number of day trades for accounts < $25k) applies only to margin accounts, but not to cash accounts!

    See also:
    "Pattern day trading restrictions don’t apply to cash accounts. (They only apply to margin accounts, like Instant and Gold.) This means you can trade stocks, ETPs, and options without worrying about your number of day trades.
    "PDT rule does not apply to cash accounts. Therefore, TD Ameritrade allows unlimited number of day trades on cash accounts.
  2. SunTrader


    Of course.

    Now fire up that penny stock scanner.
    VPhantom and ElCubano like this.
  3. Yeah, why not! :)
    Nope, won't work that much b/c of the T+2 rule (or something that) for cash accounts.
    Ie. money from closed position gets released only after 2 days or so.

    But nevertheless one can do practically unlimited # of daytrades, if enough cash is avail in the cash acct.
    Last edited: Jul 14, 2022
    VPhantom likes this.
  4. tomkat22


    But cant do any shorting in a cash account. Which reduces your money making potential by exactly 50 %.
  5. volpri


  6. volpri


  7. But for this you can buy a Long Put in a cash account, it works similar to shorting a stock, is even much cheaper.
  8. tomkat22


    Day trading options? Too complicated for my tiny little brain.LOL
    murray t turtle likes this.
  9. ElCubano


    absurd statement
    Statistical Trader likes this.
  10. yeah, pretty much
    #10     Jul 14, 2022