Day trading is buying and selling the same shares or other securities such as options and currencies within the same trading day (during US share markets opening and closing). A person who trades this way is called a day trader. Day trading often used interchangeably with the term intraday trading. Day trading can also be used to describe frequent trading, such as buying and selling the same shares within a trading week. Typically, the aim of day trading is to benefit from stock movements and volatility hoping to make a capital gain quickly, which has not always proven to be successful for some day traders.
Pattern day trading (PDT) is a more specific trading activity that is governed by FINRA rules. PDT is when an investor buys and sells any stock 4 times within 5 consecutive trading days. To be allowed to do this by their broker or broker-dealer, an investor must have minimum asset value of US$25,000 (cash and/or securities) in their brokerage account. When an investor is recorded as a PDT, they can make unlimited day trades. Learn more about day trading and risks.
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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