The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, I want to go through our ultimate quick guide to day-trading rules or what's commonly referred to as pattern day-trading rules or PDT rules. The idea behind these rules are basically the way for an industry or a broker to put in place some sort of adopted principles that prohibit people from being pattern day-traders or day-traders without having enough capital to support that. Now, I think it's a little bit confusing because sometimes people think that if you make a bunch of trades on the same day that you’re automatically classified as a pattern day-trader, but that may not be the case. The actual rules may differ from broker to broker, but the general consensus is that if you are entering and exiting the same security four to five times in the next course of four to five business days, then that may trigger some alerts in your broker system that would tag you as a pattern day-trader. Now, the key here is that