Margin Loans

Margin Requirements Scenarios
Margin Buying Power Scenarios
Margin Call Scenarios
Good Faith Violations and 90-Day Restriction Scenarios
Pattern Day Trader Scenarios

Pattern Day Trader Scenarios

Scenario 1 : Assets over $25,000

Mia has $30,000 in her margin account. Her trading activities for the past week are as follows:

Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Buy ABC
Sell ABC
Buy ABC Sell ABC Buy XYZ
Sell XYZ
Buy ABC
Sell ABC
   
        Short Sell XYZ
Buy to Cover XYZ
   

> She became a pattern day trader because she did 4 (more than 3) day trades in 5 business days. But since she has over $25,000 in her margin account, being listed as a pattern day trader will not influence her trading privileges as long as her account value remains above $25,000.

Scenario 2 : Assets under $25,000

Jeff has $20,000 in his margin account. His trading activities for the past week are as follows:

Monday
1/1
Tuesday
1/2
Wednesday
1/3
Thursday
1/4
Friday
1/5
Saturday

Sunday

  Buy ABC Sell ABC Buy XYZ
Sell XYZ
Short Sell XYZ
Buy to Cover XYZ
   
Monday
1/8
Tuesday
1/9
Wednesday
1/10
Thursday
1/11
Friday
1/12
Saturday

Sunday

Sell XYZ Buy ABC Sell Short ABC        
Buy XYZ Sell ABC Buy to Cover ABC        

> He became a pattern day trader because he did 4 (more than 3) day trades in 5 business days. Since his account has less than $25,000 in assets, he can no longer do day trades until he deposits more funds to his account in order to maintain a total account value of over $25,000.


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