Pattern Day Trading

A day trade is defined as opening and closing a position or closing and opening a position on the same security in a margin account on the same day. According to Financial Industry Regulatory Authority (FINRA) rules, anyone who executes four or more day trades within a rolling five-day period is considered a pattern day trader. All brokerage firms that are registered in the United States, regulated by FINRA, and regulated by the New York Stock Exchange are subject to day trading rules. 

Keep In Mind:

● A cash account allows for an unlimited number of day trades, assuming you have the settled funds to do so. After the sale of a security, funds take one business day to settle. If you engage in day trading using unsettled funds, a good faith violation will occur. For more information, click here.

● If you open a position and the position is closed out on the same day due to a forced liquidation, it will count as a day trade.

● If you execute four or more day trades within a rolling five day period and the number of day trades represents more than 6% of your total trades within your margin account (within the same period), you will be flagged as a pattern day trader, regardless of whether your account’s equity is greater than $25,000 or not. For more information, click here.

● For risk management purposes, if you place an order to open a position and then place an order to close the position on the same security on the same day, it will be counted towards your total day trades, regardless of whether the second order is filled. If you cancel the second order before it is executed, it will not count towards your total day trades. For further information, click here.

This presentation is for informational and educational purposes only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided herein is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investment time horizon, or risk tolerance, and does not constitute investment advice. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. All investments carry risks, including the potential for loss of principal. 

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. 

In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).