1. What is a day trader?

The NASD and NYSE define a Pattern Day Trader (PDT) as one who effects 4 or more day trades (same day opening and closing of a given equity security ("stock") or equity option) within a 5 business day period.
Please note that Futures contracts, Futures Options and Single Stock Futures are not included in the SEC Day Trade rule.

2. What is the definition of a "Potential Pattern Day Trader"?

A potential pattern day trader error message means that an account has less than the SEC required $25,000 minimum equity with loan value AND the number of available day trades (3) has already been used within the last 5 days.

The Sonray Global system is programmed to prohibit any further trades to be initiated in the account, regardless of the intent to day trade that position or not. The Sonray Global system is programmed to protect the accounts with less than $25,000 so the account would not “potentially” be flagged as a day trading account.
Please note that if an account receives the error message “potential pattern day trader”, there is no PDT flag to remove. The account holder will need to wait for the 5-day period to end before any new positions can be initiated in the account.

3. What happens if an account with less than $25,000 is flagged as a day trading account? Or, if the account is flagged as a PDT account, and the value subsequently falls below the SEC required $25,000 minimum (intraday included)?

The customer has the following options:
A. Deposit funds to bring the account’s equity up to the SEC required minimum of $25,000
B. Wait the required 90 day period before any new positions can be initiated
C. Request a PDT account reset

If the intraday situation occurs, the customer will immediately be prohibited from initiating any new positions. Customers should be able to close any existing positions in his account, but will not be allowed to initiate any new positions.
The customer will have the same options listed above, however, if at any time the Equity with Loan value figure goes back above the threshold amount ($25,000), then the account will once again have unlimited day trades available.

4. What is an account reset?

The NASD has provided brokerage firms the ability to remove the PDT flag from a customer’s account once every 180 days. If an account was erroneously flagged, and the customer’s intent is not to day trade in his/her account, Sonray Global has the ability to remove this flagging. Once the PDT flag is removed, the customer will then be allowed 3 day trades every 5-business days. If an account gets re-flagged as a PDT account within 180 days after the reset, the customer then has the following options:

A. Deposit funds to bring the account’s equity up to the SEC required minimum of $25,000
B. Wait the required 90 day period before any new positions can be initiated

5. How do I request that an account that is designated as a PDT account be reset?

Please download the following document:
The NASD and NYSE define a Pattern Day Trader (PDT) as one who effects 4 or more day trades (same day purchase and sale of a given equity security ("stock") or equity option) within a 5 day period, and NYSE and NASD rules place certain restrictions on those who are deemed to be pattern day traders. If an Interactive Brokers ("Sonray Global") account effects three (3) day trades involving stocks or equity options within any five (5) day period, Sonray Global will require that such account satisfy the minimum equity requirement of $25,000 before Sonray Global will accept the next order to purchase or sell a stock or equity option. Once the account has effected a fourth day trade (in such 5 day period), Sonray Global will deem the account to be a PDT account.
Please note that the PDT regulations allow a broker to remove the PDT designation if the client acknowledges that s/he does not intend to engage in day trading strategies, and requests that the PDT designation be removed. If you wish to have the PDT designation for your account removed, please provide Sonray Global with the following acknowledgements:

1. I do not intend to engage in a day trading strategy in my Sonray Global account.
2. I hereby request that Sonray Global no longer designate my account as a "Pattern Day Trading" account under NYSE and NASD rules.
3. I understand that if, following this acknowledgement I engage in Pattern Day Trading, my account will be designated as a "Pattern Day Trading" account, and Sonray Global will apply all applicable PDT rules my account.

If you wish to have Sonray Global remove the Pattern Day Trader designation for your account, verify that your account number is correctly included, and type "I agree". We will then process your request as quickly as possible, which is usually within 24 hours.
Please follow the instructions included in the above paragraph of the agreement.
Please log onto your Account Management section of the web site, and click on "Trouble Ticket". Paste the form, along with your account number, your name, and you must state “I agree” to the statements within the PDT reset letter.

6. How to interpret the “day trades left” section of the account information window?

For example, if the window reads (0,0,1,2,3), here is how to interpret this information:
If today was Wednesday, the first number within the parenthesis, 0, means that 0-day trades are available on Wednesday. The 2nd number in the parenthesis, 0, means that no day trades are available on Thursday. The 3rd number within the parenthesis, 1, means that on Friday 1-day trade is available. The 4th number within the parenthesis, 2, means that on Monday, if 1-day trade was not used on Friday, and then on Monday, the account would have 2-day trades available. The 5th number within the parenthesis, 3 means that if no day trades were used on either Friday or Monday, then on Tuesday, the account would have 3-day trades available.