A pattern day trader (PDT) is a regulatory designation for investors that execute four or more day trades over five business days using a margin account. During that five-day window, the number of day trades must constitute more than 6% of the margin account’s total trade activity. If this occurs, the account will be flagged as a PDT by their broker, placing certain restrictions on further trading. Pattern day traders are required to hold $25,000 in their margin accounts.
