Let’s talk about day trading because life is short so let’s be wild sometimes but not always. Oscar WILDe once said, “Everything in moderation, including moderation.” FINRA defines day trading, also known in my brain as tay drading, as “a trading strategy where an individual buys and sells (or sells and buys) the same security in a margin account on the same day in an attempt to profit from small movements in the price of the security.” It can only happen in a margin account! So, if you have a cash account and use this strategy, it is day trading but not. Also, day trading is different from what it means to get flagged as a pattern day trader, which is more about five days than just one. According to FINRA, “you’re considered a pattern day trader if you execute four or more “day trades” within five business days—provided that the number of day trades represents more than 6 percent of your total trades in the margin account for that same five business day period.” That 6% factor must be newer. I don’t remember that being a thing when I passed the Series 7 in 2021. (humble flex… is that what the kids used to call that? Teehehe.) Okay. What happens if you get flagged? DISASTER!!! Just kidding. If your account stays at a value of $25,000 or higher at all times, it probably won’t matter much to you. If you can’t keep it at 25K or higher at all times, then you will have some issues that need tissues. To be continued… searching for tissues… talk amongst yourselves… okayluvubuhbybe
