Day Trading Margin Calls

May 14, 2020

The rules permit a day trader to trade up to four times the maintenance margin excess in the account as of the close of business of the previous day. If a day trader exceeds the day-trading buying power limitation, the firm will issue a day-trading margin call to the account. The trader will then be required to deposit funds to meet this day-trading margin call. Until the margin call is met, the account will be restricted to closing transactions only. If the day-trading margin call is not met by the fifth business day, the account will be further restricted to trading only on a cash available basis for 90 days or until the call is met. The rule applies to all day trades, whether you use leverage (margin) or not. In addition, the rules require that any funds used to meet any day-trading margin calls remain in the account for four business days.

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