By Matthew Makowski Violating the pattern day trading rule can be a costly mistake for active investors. For the uninitiated, it can result in trading restrictions or a locked account. And when that happens, any holdings can be blocked from being sold… Meaning the potential loss of short-term profits.
How the pattern day trading rule is enforced varies between different brokerages. But the baseline for what triggers it as established by the Financial Industry Regulatory Authority (FINRA) is pretty clear. A pattern day trader is:
“… any margin customer that day trades (buys then sells or sells short then buys the same security on the …read more
