Day trade calls can be tricky and inconvenient, so it’s good to know how to prevent them, and what to do if you find yourself in one.
Before You Begin
- Day trade calls are industry-wide regulatory requirements.
- Cash accounts aren’t subject to day trade call rules.
- Day trade calls aren’t the same as pattern day trade restrictions, though they’re both relevant if you day trade stocks or options.
How Day Trade Calls Happen
You’ll get a day trade call if you exceed your regulatory day trading limit. Your specific day trading limit is based on a specific start of day value. Then, your day trade limit will change throughout the day based on the order, volume, and type of day trades that you make, not simply the number of day trades that you make.
You’ll use more of your day trade limit if you frequently day trade high-volatility stocks rather than low-volatility stocks. You can see a stock’s volatility rating on the stock’s Detail page.
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 if you hold mostly low-volatility stocks.
You can find your day trade limit in your app:
- Tap the Account icon in the upper left corner.
- Tap Account.
- Scroll down to see your day trade limit.
You can increase your day trade limit by depositing funds, but not by selling stock.
Receiving a Day Trade Call
We’ll warn you before you buy a stock that might put you at risk for being unable to sell the stock (without receiving a day trade call or exceeding your day trade limit). If you choose to buy the stock anyway, the app will warn you that selling the stock will cause you to exceed your limit. If you choose to exceed your day trade limit, you’ll be issued a day trade call.
If you day trade without resolving your day trade call, or if you let your day trade call go past due, you’ll be prevented from day trading for ninety days. This means you won’t be able to place any day trades for a ninety-calendar-day period.
Resolving a Day Trade Call
You can resolve your day trade call by depositing the amount displayed in the day trade call email, in the in-app card, and in your account menu. You’ll be able to withdraw the money that you deposit after the standard, five-day settlement period.
You have five trading days from the date of issue to deposit the necessary amount before you’re prevented from day trading for ninety calendar days.
Once you’ve resolved your day trade call, you can resume day trading on the very next trading day.