By Matthew Makowski Pattern day trading is more a designation than a style of investing. And the Financial Industry Regulatory Authority (FINRA) gets to decide who is and isn’t qualified to do so.
At its root, pattern day trading is defined as the engagement of four or more “day trades” within five business days. And those day trades have to represent more than 6% of a trader’s total trade activity in their margin account over that same five-day period.
To help unpack this, let’s first define what a “day trade” is. A day trade is when someone buys and sells (or sells and buys) the …read more
