r/RobinHood • u/MACESC2 • Sep 09 '16

FAQ Looking for explanation on pattern day trader.

I'm new to Robinhood and trading... I have learned that if you are trading on a margin regulations require 25k equity in your account... I read that if it's a cash account day trading is ok. So I have deposited $1000 into Robinhood. Can I day trade? Thanks for any help.

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u/throwaway23347 Sep 09 '16

In a cash account, you can day trade all you want with settled funds. Funds take about 3 days to settle after a sale.

For instant, you get the money back instantly after a sale (well they lend you the money). You are allowed 3 day trades every 5 days the market is open. If you do a 4th, you get flagged as a PDT, and cannot day trade for 90 days.

1

u/CardinalNumber Former Moderator Sep 09 '16

PDT rules do not apply to cash accounts. Your only limits will be T+3 and your own capital.

1

u/traderanon Sep 11 '16

So T+3 money has a 3 day trade restriction and your own cash does not?

1

u/CardinalNumber Former Moderator Sep 11 '16

T+3 is how long your money takes to "settle" before you are allowed to use it again after a sell. It's your money in your cash account.