Not Defined For Cash Accounts
The Pattern Day Trading rule regulates the use of margin and is defined only for margin accounts. Cash accounts can not use margin, so there is no way to further restrict their use of margin, so there is no rule to classify them as engaging in Pattern Day Trading. They may still engage in day trading, even at a frequency that would classify a margin account as engaging in Pattern Day Trading, as long as this does not result in free riding, the selling of securities bought with unsettled funds before the funds have settled. Any instance of free-riding will cause a cash or margin account to be restricted for 90 days from purchasing securities with unsettled funds.
Read more about this topic: Pattern Day Trader
Famous quotes containing the words defined, cash and/or accounts:
“Why is it so difficult to see the lesbian—even when she is there, quite plainly, in front of us? In part because she has been “ghosted”Mor made to seem invisible—by culture itself.... Once the lesbian has been defined as ghostly—the better to drain her of any sensual or moral authority—she can then be exorcised.”
—Terry Castle, U.S. lesbian author. The Apparitional Lesbian, ch. 1 (1993)
“It seems I impregnated Marge
So I do rather feel, by and large,
Some cash should be tendered
For services rendered,
But I can’t quite decide what to charge.”
—Anonymous.
“Friendship is friendship, but accounts must be kept.”
—Chinese proverb.