What Is a Day Trade Call?
A day trade call occurs when you exceed your regulatory Day Trading Limit. Your Day Trading Limit is based on the order, volume, and type of day trades that you make, not the number of day trades that you make. For example, you’ll run into your day trade limit more often if you are frequently day trading high volatility stocks rather than low volatility stocks. You can see a stock’s volatility on the stock detail page of the app.
You can’t day trade while you’re in a day trade call.
What Is Your Day Trade Limit?
Your day trade limit is set at the start of each trading day. It’s based on the amount of cash that you have in your account as well as the types of stocks that you hold overnight. In general, your day trade limit will be higher if you have more cash than stocks or hold mostly low volatility stocks.
The only way that your Day Trade Limit can change during the day is by depositing funds. You can’t raise your day trade limit by selling stock.
By default, the app will warn you before you buy stock that will put you in a position where you may be restricted from selling. If you choose to buy the stock, the app will prevent you from selling that stock and exceeding your limit. If you exceed your day trade limit, you will be issued a day trade call.
For more information on Day Trade Limits, please visit the Financial Industry Regulatory Authority’s article here.
Why Am I in a Day Trade Call?
You are issued a day trade call if you exceed the regulatory limit for day trading. This means that you chose to buy stock knowing that you were restricted from selling it, but decided to sell anyway. Until you resolve your day trade call, you won’t be able to make any day trades.
What Happens When I’m in a Day Trade Call?
You can’t day trade while you are in a day trade call. If you day trade without resolving your day trade call, or let your day trade call go past due (in 5 days), then you’ll be restricted from day trading for 90 days. You can learn more about restrictions here.
How Do I Resolve My Day Trade Call?
You can resolve a day trade call by depositing money into your account. You can find this amount in the day trade call email, in a card in the app, and in your account menu. You’ll be able to withdraw the money that you deposit after the normal, five trading day holding period.
You can’t sell stocks to cover a day trade call. You have five trading days to cover your day trade call - if you don’t, your account will be restricted from day trading for 90 days.