What Happens If I Get Flagged as a Pattern Day Trader?

What replaced the old PDT flag

FINRA's new intraday margin standard doesn't count day trades at all. Instead, brokers monitor each margin account's "intraday margin deficit," the gap between the margin required for a customer's actual market exposure during the day and the equity in the account. If a deficit occurs, the broker requires it to be covered promptly, generally within 15 business days. Accounts that make a repeated practice of failing to cover deficits can face a 90-day restriction preventing new short positions or debit balances, similar in spirit to the old PDT restriction but triggered by actual exposure rather than a trade count. There's no day-trade-count threshold and no PDT-specific $25,000 minimum under this new standard; the general minimum to hold any margin account at all is $2,000, a separate rule that predates this change.

How the old flag worked, if your broker hasn't switched yet

A margin account got flagged as a Pattern Day Trader account when it placed 4 or more day trades (buying and selling, or short selling and buying to cover, the same security in the same session) within any 5 business day window, and those day trades made up more than 6% of the account's total trading activity in that window. Most brokers applied this automatically, flagging the account the moment the 4th qualifying day trade executed.

What happened immediately after the old flag

• If account equity was already at or above $25,000, the flag was mostly a formality — day trading continued as long as equity stayed above that minimum.
• If equity was below $25,000, the broker generally issued a day trading margin call and restricted day-trading buying power.
• The account typically got up to 5 business days to deposit funds or securities to bring equity back up to $25,000.

What happened if the call wasn't met, under the old rule

If the $25,000 equity call wasn't met within the window the broker allowed, most brokers restricted the account to trading only with settled cash for a period, commonly 90 days, or until the equity requirement was met, whichever came first. This mechanism no longer applies to accounts on the new intraday margin standard, but may still be in effect at brokers still completing their transition.

What to do now

• Check your broker's margin disclosures, or ask support directly, to find out whether your account is on the old PDT rule or the new intraday margin standard.
• If your broker has switched, the day-trade count and $25,000 line are no longer the operative constraints on your account — your actual intraday exposure relative to your equity is what matters now.
• If your broker hasn't switched yet, the legacy mechanics above still apply, and staying under 4 day trades in 5 business days or maintaining $25,000+ equity avoids the restriction the same way it always did.
• Trading in a cash account instead of a margin account has never been subject to the day-trade-count PDT rule, old or new, though cash accounts have their own settlement-timing limits.