SIE practice questionhardPattern Day Trader
Under FINRA rules, a pattern day trader is defined as a customer who executes how many day trades within five business days?
- AThree or more
- BFour or more✓ Correct answer
- CTwo or more
- DTen or more
Explanation
Why B — Four or more
A pattern day trader (PDT) is defined as a customer who executes four or more day trades within five business days, provided the number of day trades represents more than 6% of total trades in the account during that period. Pattern day traders must maintain a minimum equity of $25,000 in their margin account. A day trade is defined as buying and selling (or selling short and covering) the same security on the same day.
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