A pattern day trader (PDT) is a regulatory designation for those traders or investors that execute four or more day trades during five business days’ time using a margin accountr. The number of day trades must constitute more than 6% of the margin account’s total trade activity during that five-day window. If this occurs, the trader’s account will be flagged as a PDT by their broker. The PDT designation places certain restrictions on further trading and is in place to discourage investors from trading excessively.
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