I'm a position trader but occasionally need the 4x margin. Is it possible to get the PDT designation permanently so I don't have to make 6 random day trades from time to time just to stay PDT?
Possible to get PDT designation permanently?
- Thread starter turkeyneck
- Start date
I'm pretty sure it stays with your account by default as long as you stay above the $25k minimum. But be aware that the overnight margin is still a max of 2x -- the 4x is intraday only.
A possible alternative, if your broker offers it, is "customer portfolio margin", which doesn't have overnight vs. day distinctions (at least not by law) nor do you need to trade 6 times intraday with the account to enable it (you apply for it explicitly). "Portfolio margin" usually requires a larger minimum account size, $100k at many of the discount brokers that offer it. Just be careful if you use PM, as it allows for much more leverage than Reg T (only 15% equity required, even for overnight, on fully marginable portfolios).
A possible alternative, if your broker offers it, is "customer portfolio margin", which doesn't have overnight vs. day distinctions (at least not by law) nor do you need to trade 6 times intraday with the account to enable it (you apply for it explicitly). "Portfolio margin" usually requires a larger minimum account size, $100k at many of the discount brokers that offer it. Just be careful if you use PM, as it allows for much more leverage than Reg T (only 15% equity required, even for overnight, on fully marginable portfolios).
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Also please read your brokers requirements for opening a stock trade on margin versus maintaining a stock position. They are different. I only say this if you occasionally hold a stock overnight. Some brokers are very bad (lax, even some big ones) about letting you go over margin midday and when they reconcile at night, you can get a surprise margin call that you were not expecting. No matter what the margin allowance screen shows midday, you as the trader are "solely responsible" for staying in bounds.