Pattern Day Trader Rule... One-Way or RT?

[mytwocents]

Just want to clarify something here....

Regardless of the amount of time I'm holding a stock, but assuming I'm talking about within the 5 business days.... is each trade considered 1 trade or is each round-trip considered 1 trade?

If it's the latter, then what if I don't sell my shares at once...say I bought 1000 shares and then later sold 500 and then later again, sold the other 500...is this 3 trades? 1? I would have thought that would be 3 trades...but perhaps not? I thought I understood the rule but I read something else on IBs website and its got me wondering..... ??

 

[Lucrum]

As long as you hold the position overnight then you can exit the position all at once or a little at a time and it still won't count as a day trade regardless of how much longer you hold it.
For the PDT rule all that matters are the trades you enter into AND exit the same day.

 

[Lucrum]

Also if your using IB there is a place on your "account" window that tells you how many daytrades you have available at any given time.

 

[mytwocents]

So then technically I'm allowed to enter and exit any given stock on the same day but a maximum of 3 times (or whatever the number is) within a 5 day period? AND I can enter as many positions as I want to and exit them just as long as I hold each of them at least overnight?

Quote from TL Trader:

As long as you hold the position overnight then you can exit the position all at once or a little at a time and it still won't count as a day trade regardless of how much longer you hold it.
For the PDT rule all that matters are the trades you enter into AND exit the same day.

 

[Lucrum]

Quote from mytwocents:

So then technically I'm allowed to enter and exit any given stock on the same day but a maximum of 3 times (or whatever the number is) within a 5 day period? AND I can enter as many positions as I want to and exit them just as long as I hold each of them at least overnight?

Yes your allowed a total of 3 day trades per 5 day period, and any positions you hold overnight will not count against your 3 trades.
Now just so there is no misunderstanding that's 3 day trades period, not 3 trades per stock.

 

[mytwocents]

Ah....Well I'm glad I asked because I obviously didn't understand the rule!

And just so I'm positive on this..... here is an example of what WOULD be allowed...or so I think:

Monday - Buy 100 MSFT, sell 100 MSFT
Buy 100 CSCO, sell 100 CSCO
Buy 100 INTC, sell 100 INTC
Buy 100 CSCO

Tuesday - Sell 1000 CSCO
Buy 100 GE

Wednesday - Sell 100 GE
Buy 100 MSFT

Thursday - Sell 100 MSFT

etc..... and I would not be classified as a PDT...correct?
(By the Monday close I would have used up my 3 daytrades/5 day period at this point so I wouldn't be able to make another daytrade until next Monday...right?)

Sorry if I'm beating a dead horse but I honestly didn't think this was the way it was until you clarified it for me so I just want to make sure...

Quote from TL Trader:

Yes your allowed a total of 3 day trades per 5 day period, and any positions you hold overnight will not count against your 3 trades.
Now just so there is no misunderstanding that's 3 day trades period, not 3 trades per stock.

 

[Lucrum]

Quote from mytwocents:

Ah....Well I'm glad I asked because I obviously didn't understand the rule!

And just so I'm positive on this..... here is an example of what WOULD be allowed...or so I think:

Monday - Buy 100 MSFT, sell 100 MSFT
Buy 100 CSCO, sell 100 CSCO
Buy 100 INTC, sell 100 INTC
Buy 100 CSCO

Tuesday - Sell 1000 CSCO
Buy 100 GE

Wednesday - Sell 100 GE
Buy 100 MSFT

Thursday - Sell 100 MSFT

etc..... and I would not be classified as a PDT...correct?
(By the Monday close I would have used up my 3 daytrades/5 day period at this point so I wouldn't be able to make another daytrade until next Monday...right?)

Sorry if I'm beating a dead horse but I honestly didn't think this was the way it was until you clarified it for me so I just want to make sure...

OK I may not be explaining this very well.
Actually on your example, the instant you sold 100 INTC on Monday you would be done for the rest of the week. Unable to make ANY trades regardless of how long you intended to hold them. It would be the following Monday before you could trade again.

 

[Lucrum]

You're really not concerned with being labeled a PDT you're just constantly trying not to use up the day trades you do have so that you always have a trade available in case an opportunity comes up.

 

[mytwocents]

Alright....so then how about this....:

Monday - Buy 100 MSFT, sell 100 MSFT
Buy 100 CSCO
Buy 100 INTC

Tuesday - Sell 100 CSCO
Sell 100 INTC
Buy 100 GE
Buy 100 INTC

Wednesday - Sell 100 GE
Buy 100 CSCO, sell 100 CSCO

Thursday - Sell 100 INTC

(At this point I could still do another 'daytrade' and be OK...?)

Thanks...and again, sorry for being so clueless on this one...

Quote from TL Trader:

You're really not concerned with being labeled a PDT you're just constantly trying not to use up the day trades you do have so that you always have a trade available in case an opportunity comes up.

 

[Lucrum]

Quote from mytwocents:

Alright....so then how about this....:

Monday - Buy 100 MSFT, sell 100 MSFT
Buy 100 CSCO
Buy 100 INTC

Tuesday - Sell 100 CSCO
Sell 100 INTC
Buy 100 GE
Buy 100 INTC

Wednesday - Sell 100 GE
Buy 100 CSCO, sell 100 CSCO

Thursday - Sell 100 INTC

(At this point I could still do another 'daytrade' and be OK...?)

Thanks...and again, sorry for being so clueless on this one...

Yes at that point on Thursday you would still have 1 day trade left for that 5 day period. You used 1 on Monday (MSFT) and 1 on Wednesday (CSCO).
I think you got it now and your not the first to have trouble understanding the PDT.