Using Robinhood To Day Trade – Daily trading rules are set by FINRA, one of our regulators. We’ve gone a step further and provided tools to make sure you’re investing responsibly.
Day trading: You buy and sell (or sell and buy) the same stock or ETP on the same trading day. You open and close the same option contracts on the same trading day.
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Friday trading restrictions do not apply to cash accounts. Applies to margin (including design) accounts only. This means you can trade your stocks, ETPs and options without worrying about your daily trading numbers in a cash account.
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If you make 4 or more day trades in 5 trading days, you are considered a day trader and the number of daily trades is more than 6% of the total number of trades in your margin broker account during those 5 trading days. This rule only applies to margin accounts (including desin) and if your account is set to PDT, your portfolio must be at least $25,000,000 to continue day trading. The value of your portfolio is the sum of your cash, stocks and options, excluding crypto positions. The value of your portfolio can fluctuate by more than $25,000 at any given time during the trading day, but we only consider the closing balance of the previous trading day. Check your day trading counter to see if you are limited to day trading in the program or not. Also, the 5 trading day window may not coincide with a calendar week.
There can be 5 trading days from Wednesday to Tuesday. If you place a fourth day trade within the 5 trading day window, your brokerage account will be marked for day trading for 90 calendar days. This means that you cannot make any trades within 90 days unless you bring your portfolio value (excluding crypto positions) above $25,000. At the end of the trading day, you will be issued a service call for the shares and will be limited to 90 calendar days or until the end of the trading day with a portfolio value of $25,000,000. Financial service call. However, if you trade for one day, your margin account is limited to closing. This means that you can sell stocks, ETPs or options that you already own, but you cannot open new positions. You can exceed this limit by: Transfer to money account Bring your portfolio value (minus crypto) over $25,000 (e.g. 90 days after the start of the limit)
Since FINRA sets a portfolio value of $25,000,000, all brokers must comply. More information on the day trading rules can be found on the FINRA website.
If you place an order, it will not count as a day trade unless it is filled. On the intraday trading floor, you may see an open order that is submitted but not executed. This will help warn you in advance that if your order is filled, it will count as a second day trade.
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If you want to see how many daily trades you have made in the app during the current 5 trading days: select Account → Settings (gear) or menu (3 bars) Investment → Daily Trades
If you are currently designated as a pattern trader, you may remove your daily trade flag and/or associated restrictions at once. See your options here.
Friday trade protection alerts you when you plan to trade on the fourth day. This feature gives you the option to proceed with the fourth trade or cancel it to avoid being designated as a regular day trader. See Day Trading Protection for more information.
Orders are usually filled all at once, but sometimes you may see multiple or partial fills. Sometimes this is the case with large orders or small stock orders. For regulatory purposes, each fill refers to the day’s trading volume, so selling small stocks or placing particularly large orders can increase your chances of landing a day’s trade.
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A buy order to buy 10,000 shares of XYZ can be divided into individual orders: Buy 1,000 shares Buy 2,000 shares Buy 3,000 shares buy 1,500 shares buy 2,500 shares The sell order is fully executed before the purchase, paired with each sell order, there is a risk of multiple trades resulting in multi-day trades. If you place a sell order before buying all 10,000 shares, each sell order placed on the stock that day (up to 5) will count as a separate day trade.
If you are designated as a Day Trader (PDT), you may enroll in the Broker Cash Sweep program, but you will not earn interest until your PDT flag is removed. If you are designated as a PDT when you enroll in the broker’s settlement program, you will not be accepted into the broker’s settlement program and will receive your money back from the program’s banks. Interest accrued will be paid into your brokerage account, but you will not receive additional interest until you are registered as a PDT. The reason we no longer participate in the broker’s settlement program if you are designated as a PDT is that cash in the program’s banks does not count toward the $25,000,000 required to continue daily trading. Raffle cash is also not included in daily purchases. Allowing day traders to participate in a broker’s settlement program results in multi-day trading calls for their clients, so the industry standard prohibits these programs for PDTs. See FINRA Rule 4210(f)(8)(B) for more information on the definition and requirements of a PDT.
Even if your account is designated for PDT, you will not be able to participate in a single equity loan if your collateral accounts have 25,000,000 or more (Gold and Dessine). Until the PDT flag is removed, the loan facility will be closed and all your borrowed shares will be returned to your account. We now disallow equity based loans until you are declared PDT, as equity loans do not count towards the $25,000 minimum.
Select Account Select Menu (3 bars) or Settings (gear) → Select Investment Day Trading Settings → Switch to Cash Account
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Day trading can be really complicated to understand, so here are some examples of what day trading is and isn’t.
You start with zero shares of ABC, then: Sell 1 ABC Buy 1 ABC This is a day trade because you bought ABC on the same trading day.
You start with 10 shares of ABC, then: Buy 10 ABC Buy 5 ABC Sell 5 ABC Sell 5 ABC This is a day trade because you bought and sold ABC on the same trading day.
You start with 10 shares of ABC, then: Sell 1 ABC Buy 10 ABC Although you already own 10 shares of ABC, you opened a new position in ABC with your initial purchase. This is considered day trading.
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You start with zero capital on stock ABC, then: Buy 1 ABC 2 Buy ABC 7 Sell ABC 1 Sell ABC 5 Sell ABC 4 Sell ABC This ABC is considered a day trade because there is only one change between the buy and sell. .
You start the ABC Call contracts at zero and then: Sell-Close 1 ABC Call 1 ABC Call This is a day trade because you opened and closed the ABC calls on the same trading day.
ABC contracts you start with zero and then: Open-Open Put 1 ABC Buy-Close Put 1 ABC This is a day trade because you opened and closed ABC on the same trading day.
You start ABC call contracts with zero, then: Open-Open 1 ABC Call-Open-Open 3 ABC Call-Open-Open 2 ABC Call-Close 6 ABC Call This is considered a day trade.
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You start the day with 1 long ABC sale, then: buy 100 ABC shares, sell 100 shares, execute 1 ABC sell trade. This counts as a day trade because you opened and closed an ABC stock position that day.
You start the day with 1 long ABC Call and zero ABC shares, then: exercise 1 ABC call, buy 100 shares sell 100 ABC shares This is considered a day trade because you opened and closed an ABC stock position on the same day.
You start with zero stock of ABC stock, then: 50 ABC Sell 15 ABC Sell 35 ABC Sell 10 ABC Sell 10 ABC Sell 10 ABC This trade is considered a two-day trade because there are two
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