The PDT rule, or “Pattern Day Trading” rule, is a regulation implemented by the SEC in 2001 to protect retail investors from incurring too much risk when trading stocks. The rule states that any investor who executes four or more day trades within a five-day period must maintain a minimum account balance of $25,000.
There are a few ways to get around the PDT rule. One is to trade options, which are not subject to the rule. Another is to trade stocks that are not listed on the major exchanges, such as over-the-counter stocks. A third way is to use a broker that offers margin trading, which allows you to borrow money from the broker to trade stocks. This can be risky, so be sure to understand the risks involved before using margin.
