Q - What is a pattern day trader (PDT)?

You will be considered a pattern day trader if you “day trade” 4 or more times within 5 business days and your day trading activities are greater than 6 percent of your total trading activity for that same 5 day period. A “day trade” is defined as buying then selling or selling short, then buying the same security on the same day. Just buying a security, without selling it later that same day, would not be considered a day trade.

Q - What is the minimum equity requirement for a pattern day trader?

If you are designated as a pattern day trader, a $25,000 minimum equity requirement must be deposited in the account prior to any day-trading activities and maintained in your account at all times. If the account falls below the $25,000 requirement, you will not be permitted to day trade until you deposit cash in the account to restore the account to the $25,000 minimum equity level.

Pattern Day Trader (PDT) in Alpaca Accounts

Currently (May 2020), all Alpaca Accounts are Margin accounts and that we currently do not support cash accounts. Further, if trading were to be done in a cash account, the rules require that s/he trade on settled cash only (effectively meaning that if s/he purchased a stock and sold it today, s/he could only use the cash from the sale after the original purchase had settled at T+2).

For more information about Pattern Day Trading, please visit:
http://www.finra.org/investors/day-trading-margin-requirements-know-rules