You'll never convince me the rule is in effect to "protect novice investors". What utter bs. I can walk in to any casino and put my entire life savings on red 13 and nobody will bat an eye.
@@ReverberatingWisdom well if it was your money being leveraged, would you want some newbie risking your 10k? and if they are going to risk it anyway, wouldnt you want them to have some skin in the game, perhaps 25k worth of skin?
@@ReverberatingWisdom yup but when you trade that 1k, it takes multiple days to settle the funds, so if you actually succeed in making $100, sell, and now have 1.1k thats in your account in miliseconds, its actually someone elses money that you can use, while yours is still settling. if you want to day trade to your hearts content you can switch your account from a margin account to a cash account and you can day trade all you want, but that 1k will take a few days to settle and you wont be given any money to use for trades until that money does settle
It’s such a stupid rule. Like, maybe restrict it to only short orders since u can actually lose more than what u put down, but why the hell are they limiting buy orders. U can only buy what u already have deposited and lose at most, what you have deposited. It doesn’t touch the broker at all. They’re getting a commission already, and they lost absolutely nothing! I was about to start dây trading until I saw this rule, and now I needa work to get 25,000 as an independent college student in order to properly daytrade
YOu can trade with a cash only account, the day trading rule is for margin accounts, which means you put in X amount of Dollars and Charles Schwab gives you Y amount to spend, where Y=(X times Z), Where Z is an arbitrary number they decide, most of the time it is 6. So if you start with $1000 in a margin account, they loan you $5000 on top to trade with. Because they are loaning you that money, they put rules on it. In a cash only account, there is 0 restrictions and you can burn your money all day, they dont care at all and they dont let you spend more than what you have.
I mean why are you trading on borrowed money? It helps the person thats loaning you the 25k, which means you only put in 5k to open the account. Where you do think the rest of that buying power is coming from? In a cash account, there are no restrictions, because you arent borrowing any money for leverage. If you put 25k, you only have 25k. If you put 25k in a margin account, you have $150k to spend, out of thin air, because theyre loaning it to you with the expectation youll trade responsibly and foot the bill for any losses.
wrong, you can day trade your hard earned money all you want in a regular cash brokerage account. The day trading rules apply to a margin account, which means youre borrowing money to fund your trades, which, by extension, isnt any of your hard earned money.
@dogsbecute no, you're wrong. Crazy how people are so confident in thier own ignorance. Cash accounts under 25k have a weekly limited number of trades. More than 4 trades a week is considered day trading. Day trading requires 25K to be in you cash account.
@@orilion1820 my brother i literally trade every day with a cash account, 1 big buy and sell a day. sometimes i do a few smaller trades but i sell within minutes of buying. I only have a cash account. I have 0 limitations. As long as the money is settled that im using. I cant, for example, buy some shares, sell, and then use those proceeds to immediately buy another share and sell it until the funds are settled. Yall are very confused, these rules only matter for Margin accounts, because youre borrowing money.
what I don't understand is I have a cash account and I made a couple trades for way less than the cash I have on hand and subtracted the amount I spent even though I sold it knowing it has to settle but i still get a warning that I only have like 1 left for the week. I thought if you have cash and you subtract what you bought, not counting the sells you could trade up to your cash, I don't get it.
All examples are of buying the same stock. 3 Day trades: Buy 10 shares, add 10 shares, add 10 more, then sell all 30 shares. This isn't just one trade! 4 day trades: Buy 10 shares, add 10 shares, followed by 4 sells orders of 5 share lots (getting out entirely). This follows FIFO (first in, first out). In other words, which ever one you have more of (buy/sell orders), this will your number of trades. 10 buys with 1 sell order = 10 trades 1 buy with 10 sell orders = 10 trades
thats wrong, in your first example thats 1 day trade. You bought 30 and sold 30. The second one is a nice brain tease for me though, because im new to this!
@dogsbecute yup. I had it wrong, esp the first one. It's a round trip so 1 day trade. I'm making this up, but you could call it 3 lot trades. It's easier to enter it into excel this way.
Our licensed investment consultants can go over this with you in more detail, including any incentives. They can be reached directly at 877-769-8006 (for prospects) or 866-855-9102 (for clients), 8:30 a.m. - 8 p.m. ET Monday-Friday. ^CH
hi everyone, does anyone know if the PDT rule is affected by a Roth IRA? meaning if I jump in and out of trades with my Roth with less then $25000 And or does not have a margin assigned to it, will it still be flagged.
Thomas, the day trading rule is the same regardless of the type of account, tax delayed or not. The $25,000 threshold is an industry standard not specific to Schwab. If you would like, you can reach a specialist directly by phone using 800-435-4000. ^CH
@@CharlesSchwab If your account has a total value of $50K, could you open and close unlimited trades per day? Or do you also need to wait for those trades to settle?
@@thomaskim3128 you can trade as much as you like if you have over 25k at the beginning of the day. But you will have to be on a margin account to day trade multiple times. If you do not have a margin account you can only trade the cash you have in your account until it clears one day later. You can't trade more than three times in a rolling 5 days with under 25k.
An account can be flagged as a PDT because of your trading patterns regardless of how much money you have in it. Having $25k minimum just keeps you from getting the account restricted. Hope this helps.
Theoretically, different trading day, so first buy then sell next day shouldn't increment the count. ^BW Check with your broker for more specific information. ^BW
so if i buy 100 shares of stock ABC at 630am and buy 100 more shares of stock ABC at 7am and sell the 200 shares of that stock at 10am this counts as one trade right?
Yes, if under 25k. Check out our webcast series Trading A Smaller Account: th-cam.com/play/PL8a6s5nq1lPTl4QH-h71y1Z5KEePqtVgy.html&si=vT4GCZYnweD-awUL ^BW
Why you guys didn’t mention that you cant do a round trip trades with a shares below 2$ ?! Even if u have more than 25k ?! Lots of users getting margin call warning ? Can you clarify this ?
Hello and thank you for reaching out. While we can only offer limited support through social media, our specialists are happy to assist. To discuss your concern with a broker, please call 800-435-4000 or initiate a secure chat session on Schwab.com, available 24/7!
Would it be considered one or two day trades if I did this: Buy 100 shares of TSLA, Buy another 100 Shares of TSLA, Then, Sell 100 Shares of TSLA, Sell another 100 shares of TSLA
It really depends when you did it. If you did those 4 transactions all on the same day, you would have two day trades. If you bought on day one and sold on day two, they wouldn't be considered day trades. ^CH
Most brokerages require margin for options and futures trading. Even though you have cash to cover the trade it's executed from a margin-type holding that 25k.
This is such a pain in the ass rule. If I want to trade 10 or 20 delta 0DTE iron condors for pennies it shouldn't be a big deal. The risk to the broker is essentially 0. I'm not levered up 10x taking insane risk and 99% of the it's a margin free trade. I could somewhat understand it if someone was taking considerable risk and the broker was having to absorb that but holy shit i'm just trying to make $50 on a Friday with my own cash here. Can this dumbass rule at least be adjusted so that it makes some sense?
@@CharlesSchwab You literially just responded to @generector8583 's comment stating the opposite! @generector8583 stated, "In plain English - if you have a cash account, non of these rules matter. Trade as much as you like." You responded with, "For clarification: Day trading rules matter for any account less than $25,000. ^CH". How does this make any sense?
@@lkeith88 Good news! You're wrong. All you have to do is wait for the funds to settle. IBKR and WeBull usually take less than 24 hours so you can trade with your cash every day! It's been great for me
I am going to start an online petition to lower the PDT rule. It’s out of control with 25,000. It’s garbage and old, out of date crap.
Yeah it should be upped to 50 k
I’d support that!
@@harrisonrichards4357why?
@@harrisonrichards4357 wtf? why?
I think like 10k is reasonable.
You'll never convince me the rule is in effect to "protect novice investors". What utter bs. I can walk in to any casino and put my entire life savings on red 13 and nobody will bat an eye.
Facts. It's definitely set up to keep most people out of day trading. Most people don't have $1000, forget $25000.
@@ReverberatingWisdom well if it was your money being leveraged, would you want some newbie risking your 10k? and if they are going to risk it anyway, wouldnt you want them to have some skin in the game, perhaps 25k worth of skin?
@hobbyhobbyhobbyhobby Who is leveraging? If I put $1000 in an account and decide to trade with it and lose it, it's my money being lost.
@@ReverberatingWisdom yup but when you trade that 1k, it takes multiple days to settle the funds, so if you actually succeed in making $100, sell, and now have 1.1k thats in your account in miliseconds, its actually someone elses money that you can use, while yours is still settling.
if you want to day trade to your hearts content you can switch your account from a margin account to a cash account and you can day trade all you want, but that 1k will take a few days to settle and you wont be given any money to use for trades until that money does settle
It’s such a stupid rule. Like, maybe restrict it to only short orders since u can actually lose more than what u put down, but why the hell are they limiting buy orders. U can only buy what u already have deposited and lose at most, what you have deposited. It doesn’t touch the broker at all. They’re getting a commission already, and they lost absolutely nothing!
I was about to start dây trading until I saw this rule, and now I needa work to get 25,000 as an independent college student in order to properly daytrade
Man if I wanna play the slots just let me play the slots
Ayyyee
Lolz
it doesn’t go with the governments agenda. They want to keep the poor people poor
lol you can play the slots with your money no problem, the problem here is youre playing the slots with BORROWED money lmao
great explanation! pls don't delete this video
the music was epic too lol
Crazy man being restricted to grow a small account. Older I get the more I'm realizing we don't have any control over shit.
YOu can trade with a cash only account, the day trading rule is for margin accounts, which means you put in X amount of Dollars and Charles Schwab gives you Y amount to spend, where Y=(X times Z), Where Z is an arbitrary number they decide, most of the time it is 6. So if you start with $1000 in a margin account, they loan you $5000 on top to trade with. Because they are loaning you that money, they put rules on it. In a cash only account, there is 0 restrictions and you can burn your money all day, they dont care at all and they dont let you spend more than what you have.
Yes you do. Use two brokers and alternative days for each. I think.
The rule about having 25K in your account doesn't help anyone. A person can lose 1K just as fast and easy as 25K.
Tht only applies to options trading.
@@NessXL What are you talking about? That goes for stocks and options. It's part of the PDT rule. Look it up.
Even with the 25k the rules stilll mess with you
I mean why are you trading on borrowed money? It helps the person thats loaning you the 25k, which means you only put in 5k to open the account. Where you do think the rest of that buying power is coming from? In a cash account, there are no restrictions, because you arent borrowing any money for leverage. If you put 25k, you only have 25k. If you put 25k in a margin account, you have $150k to spend, out of thin air, because theyre loaning it to you with the expectation youll trade responsibly and foot the bill for any losses.
@@dogsbecute wtf are you talking about?
These day trade rules vary Broker to Broker. IBKR considers 4 Leg Iron condor strategy as 4 Trades. All other brokers considers as 1 Trade.
the congress can inside trade millions but we can't day trade out hard earned money ,what is this North Korea
@@Mo-fc2vj It's set up to keep us out.
wrong, you can day trade your hard earned money all you want in a regular cash brokerage account. The day trading rules apply to a margin account, which means youre borrowing money to fund your trades, which, by extension, isnt any of your hard earned money.
@dogsbecute no, you're wrong. Crazy how people are so confident in thier own ignorance. Cash accounts under 25k have a weekly limited number of trades. More than 4 trades a week is considered day trading. Day trading requires 25K to be in you cash account.
@@orilion1820 my brother i literally trade every day with a cash account, 1 big buy and sell a day. sometimes i do a few smaller trades but i sell within minutes of buying. I only have a cash account. I have 0 limitations. As long as the money is settled that im using. I cant, for example, buy some shares, sell, and then use those proceeds to immediately buy another share and sell it until the funds are settled. Yall are very confused, these rules only matter for Margin accounts, because youre borrowing money.
Is there a PDT rule trading from europe trough Charles Shab?
Would trading Options on indexes such as SPX, SPY, QQQ be considered under a Pattern Day Trading Rule (PDT)?
Yes
what I don't understand is I have a cash account and I made a couple trades for way less than the cash I have on hand and subtracted the amount I spent even though I sold it knowing it has to settle but i still get a warning that I only have like 1 left for the week. I thought if you have cash and you subtract what you bought, not counting the sells you could trade up to your cash, I don't get it.
Important to note that PDT rule doesn't apply to Crypto trades. You can do as many crypto trades as you want in a day.
Schwab doesn't offer crypto trades at this point. ^CH
So badically just make sure you omly do 3 round trips a week?
Yes, if your account is below $25,000. ^CH
If we place a sell order before the market opens and end the transaction by placing a buy order when the market opens, do we still lose a trade right?
Yes. Extended Hours trades count. ^BW
What if I use two different trading platforms under the same user with both under 25k, will that give me double usage so 8 day trades instead of 4
The day trading rule is per account regardless of the interface used. ^CH
All examples are of buying the same stock.
3 Day trades: Buy 10 shares, add 10 shares, add 10 more, then sell all 30 shares. This isn't just one trade!
4 day trades: Buy 10 shares, add 10 shares, followed by 4 sells orders of 5 share lots (getting out entirely).
This follows FIFO (first in, first out).
In other words, which ever one you have more of (buy/sell orders), this will your number of trades.
10 buys with 1 sell order = 10 trades
1 buy with 10 sell orders = 10 trades
thats wrong, in your first example thats 1 day trade. You bought 30 and sold 30. The second one is a nice brain tease for me though, because im new to this!
@dogsbecute yup. I had it wrong, esp the first one. It's a round trip so 1 day trade.
I'm making this up, but you could call it 3 lot trades. It's easier to enter it into excel this way.
Does this apply to CFDs?
Our licensed investment consultants can go over this with you in more detail, including any incentives. They can be reached directly at
877-769-8006 (for prospects) or 866-855-9102 (for clients), 8:30 a.m. - 8 p.m. ET Monday-Friday. ^CH
hi everyone, does anyone know if the PDT rule is affected by a Roth IRA? meaning if I jump in and out of trades with my Roth with less then $25000 And or does not have a margin assigned to it, will it still be flagged.
Thomas, the day trading rule is the same regardless of the type of account, tax delayed or not. The $25,000 threshold is an industry standard not specific to Schwab. If you would like, you can reach a specialist directly by phone using 800-435-4000. ^CH
What means $25.000 in account equity? It means $25.000 in "Cash & Money Market"? Or means the total account value?
According to FINRA, the $25000 can be a mix of cash and eligible securities, so total account value. ^BW
@@CharlesSchwab If your account has a total value of $50K, could you open and close unlimited trades per day? Or do you also need to wait for those trades to settle?
@@thomaskim3128 you can trade as much as you like if you have over 25k at the beginning of the day. But you will have to be on a margin account to day trade multiple times. If you do not have a margin account you can only trade the cash you have in your account until it clears one day later. You can't trade more than three times in a rolling 5 days with under 25k.
I Wanna know about it :) @@thomaskim3128
why does my account trigger PDT when it has more than $25000? My broker says it has nothing to do with account balance but buying power
An account can be flagged as a PDT because of your trading patterns regardless of how much money you have in it. Having $25k minimum just keeps you from getting the account restricted. Hope this helps.
Why can’t we buy and sell at the exact moment we want to?
You are able to buy and sell when you want, also you'll want to confirm you're using real-time data. ^MF
If I buy 6 shares on monday and sale them the next day at 9.30 a.m and then buy again,, does it count?
Theoretically, different trading day, so first buy then sell next day shouldn't increment the count. ^BW
Check with your broker for more specific information. ^BW
so if i buy 100 shares of stock ABC at 630am and buy 100 more shares of stock ABC at 7am and sell the 200 shares of that stock at 10am this counts as one trade right?
It's the selling on the same day that would trigger one day trade. ^CH
Hi, I was recntly moved from TD to CS. I have a CASH ACCOUNT under 25K. Aplies the PDT Rule in this case?
Yes, if under 25k. Check out our webcast series Trading A Smaller Account: th-cam.com/play/PL8a6s5nq1lPTl4QH-h71y1Z5KEePqtVgy.html&si=vT4GCZYnweD-awUL ^BW
@@CharlesSchwab Does this apply to a cash account? Is this a schwab rule or FINRA rule
If I had 24,000 in my individual account and 1,000 in my Roth IRA would that count as a total 25,000?
No. It needs to be $25,000 in a single account. ^CH
Why you guys didn’t mention that you cant do a round trip trades with a shares below 2$ ?! Even if u have more than 25k ?! Lots of users getting margin call warning ? Can you clarify this ?
Hello and thank you for reaching out. While we can only offer limited support through social media, our specialists are happy to assist. To discuss your concern with a broker, please call 800-435-4000 or initiate a secure chat session on Schwab.com, available 24/7!
@tipstrips7002 are u saying a buy and sell order counts as 2 roundtrips if the stock is below 2$?
Uhhhh 3 opening trades followed by one closing trade would count as 3 day trades
True.
I thought the same thing. Buy one, add, sell all is two trades.
In plain English - if you have a cash account, non of these rules matter. Trade as much as you like.
For clarification: Day trading rules matter for any account less than $25,000. ^CH
Nice, appreciate the breakdown💪🏽.quick question,just got on Schwab are their any fees or anything for day trading?
i dont understand, like i lost money because of this rule, this is so dumb you can still lose everything this wont prevent someone from losing.
a LOT more people would be trading if the min was around 10-15 grand, 25k is quite the barrier to entry.
Why can other people do it but not me??
Would it be considered one or two day trades if I did this:
Buy 100 shares of TSLA, Buy another 100 Shares of TSLA,
Then,
Sell 100 Shares of TSLA, Sell another 100 shares of TSLA
It really depends when you did it. If you did those 4 transactions all on the same day, you would have two day trades. If you bought on day one and sold on day two, they wouldn't be considered day trades. ^CH
I want to avoid being since I am currently
The 25k minimum only applies to Margin account NOT cash accounts. What a strange way to misinterpret the truth
Most brokerages require margin for options and futures trading. Even though you have cash to cover the trade it's executed from a margin-type holding that 25k.
So.. only wealthy people can play?
This is such a pain in the ass rule. If I want to trade 10 or 20 delta 0DTE iron condors for pennies it shouldn't be a big deal. The risk to the broker is essentially 0. I'm not levered up 10x taking insane risk and 99% of the it's a margin free trade. I could somewhat understand it if someone was taking considerable risk and the broker was having to absorb that but holy shit i'm just trying to make $50 on a Friday with my own cash here. Can this dumbass rule at least be adjusted so that it makes some sense?
If you are trading in a cash account and not a margin account, then the Pattern Day Trader rule doesn't apply. ^BW
@@CharlesSchwab You literially just responded to @generector8583 's comment stating the opposite! @generector8583 stated, "In plain English - if you have a cash account, non of these rules matter. Trade as much as you like." You responded with, "For clarification: Day trading rules matter for any account less than $25,000. ^CH". How does this make any sense?
TD Ameritrade was so much better before Charles Schwab.
I dont use margin so this has nothing to do with me lol
It's the same rule even if you're trading with cash if the account is below $25k. It's such a dumbass rule.
@@lkeith88 Good news! You're wrong. All you have to do is wait for the funds to settle. IBKR and WeBull usually take less than 24 hours so you can trade with your cash every day! It's been great for me
This rule is ridiculous.
this is why i closed my acct i dont need the gov holding my hand its my money they want more in your acct so they can use your money .....
J.G Wentworth > Charles Schwab