What is the day trading rule?

I understand that if I execute more than 4 day trades in a 5 day period, I will have to bring my account value to $25,000 and open a margin account. Say I buy share X and sell X in the same day. I realize that this is considered a day trade, but would this count as 1 or 2 towards the limit of 4 (do they mean round-trip trades or each buy and sell of the same stock)?

Also, if I were to already have X in my account from a previous day, then sell it and buy it back on one day, would this be considered a day trade? ie. does it have to be "buy then sell in the same day" to be considered a day trade or is it also "sell then buy" if you already own the stock?

Public Comments

1. If you buy and sell x on one day, that is ONE of your allotted day trades.
In the second example, you have NO day trades unless you sell that second purchase on the same day.
Don't be afraid to clarify these issues with your broker. Brokers do differ as to how they interpret rules. One way brokers differ is how soon you have access to funds when a trade is closed out.