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 two business days (not including the day of deposit and the day of withdrawal, or a total of four business days).

If the trader is unable to deposit funds to meet this day-trading margin call, a liquidation of securities may be permitted to satisfy the day-trading margin call if there are sufficient open securities after the day-trading margin call is issued. Only the maintenance margin requirement of the liquidated securities can be applied towards the day-trading margin call. The trader will be flagged with a day-trading liquidation warning. In the event of third warning in a 12-month period, the account will be further restricted to trading only on a cash available basis for 90 days or until the call is met. A day-trading margin call liquidation must be approved by the TradeStation margin department.

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