Series 7 practice questioneasyMargin Accounts — Pattern Day Trader
A pattern day trader is defined as someone who executes how many or more day trades within 5 business days?
- A2
- B3
- C4✓ Correct answer
- D5
Explanation
Why C — 4
FINRA defines a pattern day trader as any customer who executes 4 or more day trades within 5 business days, provided the day trades represent more than 6% of total trades in the margin account during that period. A day trade is defined as buying and selling (or selling short and buying to cover) the same security on the same day.
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