Day Trade $25,000 again

External question — Personal Finance Stack Exchange Author: peterB Original post: https://money.stackexchange.com/questions/134911 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. If I have a margin Day Trade account, after some transactions/tradings there is only $25,000 cash in this account now. There are some cases for this Day Trade account I need to know its status. Please help: case 1: If I buy $10,000 worth of stocks in the morning, only $15,000 cash left, the above account still meets the $25,000 requirement, right? case 2: If the stocks go down in the afternoon, at the end of the trading day, that $10,000 worth of stocks only has a $9,000 market value, the above account will get a call/warning about the $25,000 requirement, telling me that account needs more cash? case 3: If I spend all $25,000 cash on stocks, now no cash left, but the market value of these stocks is above $25,000, does the above account still meet the $25,000 requirement? how about if the market value is less than $25,000?

External answer — Personal Finance Stack Exchange Author: Bob Baerker Original post: https://money.stackexchange.com/a/134912 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Some clarification first because it is not clear how many day trades you made and in what time period. You can only trade settled cash in a CASH ACCOUNT. That means that with T+2, the funds from a sale will not be available for two days. There is no limit to how many day trades you can make in a cash account as long as you are using settled funds. A pattern day trader is a person who executes 4 or more day trades (options and equities) in a rolling FIVE business day period in a MARGIN account, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. If you are a pattern day trader then you are subject to the $25k minimum. case 1: If I buy $10,000 worth of stocks in the morning, only $15,000 cash left, the above account still meets the $25,000 requirement, right? You meet the $25k requirement as long as the value of the stocks do not drop. case 2: If the stocks go down in the afternoon, at the end of the trading day, that $10,000 worth of stocks only has a $9,000 market value, the above account will get a call/warning about the $25,000 requirement, telling me that account needs more cash? That is correct. You will be restricted from further day trading until you add cash or marginable securities, restoring the $25k minimum. case 3: If I spend all $25,000 cash on stocks, now no cash left, but the market value of these stocks is above $25,000, does the above account still meet the $25,000 requirement? how about if the market value is less than $25,000? This question is just combining the questions asked in case 1 and case 2. The same answers apply.