What is a day trade?

The Financial Industry Regulatory Authority (FINRA) defines a day trade as the purchase and sale or the sale and purchase of the same security (stock, ETF, etc.) on the same day. Thus, a pattern day trader is any customer who executes four or more security day trades within five consecutive business days. We count day trades by direction and thus, any number of buy and sell orders of a single security executing on the same day are considered a pattern day trade.

Learn more about pattern day trading.