its 2 trades because you pay a commission on each trade...however say you use a platform like scottrade, and your order, of say 125 shares gets filled at two different prices, that still counts as one trade.
Pattern Day Trader question.
- Thread starter Pooks
- Start date
Well, I just found this...
" If you are in a position with one entry of 1000 shares and you take two exits of 500 shares each within the same day then this is only considered one day trade. "
this is from here: http://www.tonihansen.com/blog/2007/08/pattern-day-trader-rules.html
It is considered one daytrade...because you only made one purchase. You can sell off in increments all you want as long as you have made just one buy for the day.
Some of you are correct. It is exactly one trade. The definition of "trade" is not the transaction itself where you pay commission, but it is the action of initiating a new position. Thus, opening and closing a position within the same day will reduce your "day trades left" by 1. Whether you close it in chunks with several transactions or not is irrelevant to the definition.
Most of the brokers âpatternâ day-trading calculations are based on the spirit of NASD rules (who has the authority). The rule of thumb is that the number of day-trades depend on how you choose to close the position.
Example.1: Suppose you bought 1000sh of ABC stock at 9AM; then place an order to sell all of your ABC stocks at 9:31AM. 500sh of sell got filled at 9:31AM; the rest got filled at 1PM. (1 pattern day-trade.)
Example.2: Suppose you bought 1000sh of ABC stock at 9AM; then sold 500sh of sell got filled at 9:31AM, then sold 500sh at 1PM. (2 pattern day-trades.)
Example.3: Suppose you bought 150sh of XYZ at 9AM, another 200sh of XYZ at 10AM, another 250sh of XYZ at 11AMâall in 3 separate orders; and then finally sell 100sh of XYZ at 12PM and 500sh at 4:15PMâall in 2 separate orders. (2 pattern day-trades.)
Example.4: Suppose you bought 800sh of PQR at 8AM; you tried to sell 400sh of PQR at 4:00PMâbut only got a partial fill for 200 shares. You got the rest of the fill on the next day. (1 pattern day-trade. It is not 0 or half pattern day-trade.)
Example.5: Suppose you sold 400sh of MNO at 8AM; bought 700sh of MNO at 4:10PM with 1 order; and then sold 100sh of MNO at 4:30PM.
Example.6: (Assume you have 800sh of EFG short position from overnight.) Suppose you bought 400sh of EFG stock at 8:00AM, sold 400sh of EFG at 10AM; bought 400sh of EFG stock at 1PM.
Example.7: (Assume you have 800sh of EFG short position from overnight.) Suppose you bought 800sh of EFG stock at 8:00AM; sold 400sh of EFG stock at 10AM.
Example.1: Suppose you bought 1000sh of ABC stock at 9AM; then place an order to sell all of your ABC stocks at 9:31AM. 500sh of sell got filled at 9:31AM; the rest got filled at 1PM. (1 pattern day-trade.)
Example.2: Suppose you bought 1000sh of ABC stock at 9AM; then sold 500sh of sell got filled at 9:31AM, then sold 500sh at 1PM. (2 pattern day-trades.)
Example.3: Suppose you bought 150sh of XYZ at 9AM, another 200sh of XYZ at 10AM, another 250sh of XYZ at 11AMâall in 3 separate orders; and then finally sell 100sh of XYZ at 12PM and 500sh at 4:15PMâall in 2 separate orders. (2 pattern day-trades.)
Example.4: Suppose you bought 800sh of PQR at 8AM; you tried to sell 400sh of PQR at 4:00PMâbut only got a partial fill for 200 shares. You got the rest of the fill on the next day. (1 pattern day-trade. It is not 0 or half pattern day-trade.)
Example.5: Suppose you sold 400sh of MNO at 8AM; bought 700sh of MNO at 4:10PM with 1 order; and then sold 100sh of MNO at 4:30PM.
Example.6: (Assume you have 800sh of EFG short position from overnight.) Suppose you bought 400sh of EFG stock at 8:00AM, sold 400sh of EFG at 10AM; bought 400sh of EFG stock at 1PM.
Example.7: (Assume you have 800sh of EFG short position from overnight.) Suppose you bought 800sh of EFG stock at 8:00AM; sold 400sh of EFG stock at 10AM.
"Example.2: Suppose you bought 1000sh of ABC stock at 9AM; then sold 500sh of sell got filled at 9:31AM, then sold 500sh at 1PM. (2 pattern day-trades.)"
BUT. You don't BUY after the second SELL.. so if its viewed like that, you would have to view it as short sell, that is not covered.
So u're taking it overnight.. therefore it would not be a DAY TRADE?
ABC BUY 1000 shares.
ABC SELL 500 shares (1 pattern day trade)
ABC SELL 500 shares..
no more transactions, so its like u're carrying the second sell overnight, like a short sell, so it would not be a daytrade imo.
BUT. You don't BUY after the second SELL.. so if its viewed like that, you would have to view it as short sell, that is not covered.
So u're taking it overnight.. therefore it would not be a DAY TRADE?
ABC BUY 1000 shares.
ABC SELL 500 shares (1 pattern day trade)
ABC SELL 500 shares..
no more transactions, so its like u're carrying the second sell overnight, like a short sell, so it would not be a daytrade imo.
Pooks, NASD allows the brokerage firm to reasonably believe the example#2 as 2 "pattern" day-trades even though you may ended up having almost the same time-of-sales and executions for all the shares in example#1 and on example#2. If you want, you can place these trades with your broker next week. You may have also figured out how many (if any at all) day-trades in example#5,6,7.
It's 1 trade.
Even if it was 2 trades you wouldn't be stuck in half the position because your account got frozen. Once you pass the limit, you're allowed to get out of any positions you'd like, but you can't initiate new ones. I think someone here already alluded to that fact. How you close a position has nothing to do with the rule. A frozen account wil only be blocked from opening new positions.
Even if it was 2 trades you wouldn't be stuck in half the position because your account got frozen. Once you pass the limit, you're allowed to get out of any positions you'd like, but you can't initiate new ones. I think someone here already alluded to that fact. How you close a position has nothing to do with the rule. A frozen account wil only be blocked from opening new positions.