Stock Trading and Other Things

What qualifies as pattern day trading... want to avoid a Reg. T margin call?

I know the SEC rules / FINRA rules thanks to the series 7 exam.... but one thing isn't clear to me.

If you have a margin account that has less than $25,000 in it, you are not allowed to engage in "Pattern Day Trading" which means you are allowed three day trades within 5 business days rolling. So if you take 1 day trade on a Monday, Tuesday, and Wednesday, you cannot take another trade until the following Tuesday (in which you could only take 1 day trade since the trades you took the previous Tuesday and Wednesday still count for the 3 trades in 5 business days).With this same example, if you did not take a trade until the following Thursday, you would be fine for 3 new day trades.

Now my question about this is what is considered a day trade. I know if you buy or sell short an equity and cover within the same day, that is 1 day trade. But, what if you buy an equity, and then buy more of that equity later in the day, and then sell 1/2 of your position a bit later, and the other half after that. Would that count as 1 intraday trade or would it count as 2 trades since you had 2 buy orders and two sell orders? Or say if you buy a stock, buy more during the day, sell half, and hold the other half overnight. Does that count as a day trade?

There are a ton of different examples I can come up with, but I won't list them all. Basically, what qualifies as a day trade under FINRA and SEC regulations?

Thanks!!!
Reg T regarding the amount of equity being at a 2:1 ratio for margin....

I mixed in two things.... but the question at hand is regarding day trading!

Public Comments

1. Day trading has nothing to do with Regulation T.

2. Your first example counts as 2 day trades and second example is 1 day trade. Basically, everytime you exit or partially exit a position you opened the same day, it is day trade. Ex1. buy 100, buy another 100, buy another 100, sell 300, 1 day trade. Ex2, buy 300, sell 100, sell 100, sell 100, 3 day trades. Ex3, buy 100, sell 200, buy 100, 2 day trades.

For day traders, regulations allow brokers to extend equity position margin ratios to maximum 4:1.