Restriction on options trading

Restricted Shares vs. Stock Options: What's the Difference?

Options and Type 1 cash investments do not count toward this requirement.

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Leveraged and Inverse ETFs also have higher exchange requirements, thus reducing day trade buying power. Restricted A Restriction on options trading status will reduce the leverage that an account can day trade.

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Customers have five business days to meet the call by depositing cash or marginable securities in the account. Three Day Trade Liquidations within a month period will cause the account to be restricted. If funds are deposited to meet either a Day Trade or a Day Trade Minimum Equity Call, there is a minimum two-day hold period on those funds in order to consider the call met.

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Adding restriction on options trading days to allow for the time it takes to move funds may be necessary. Any distributions or checks written out of the account during the open day trade call period will increase the call dollar for dollar.

Day Trades in Last 5 Business Days A Day Trade is defined as an opening trade followed by a closing trade in the same security on the same day in a Margin account. Four or more day trades executed within a rolling five-business-day period or two unmet Day Trade Calls within a day period will classify the account as a Pattern Day Trader.

Customers have five business days to meet the call by depositing cash or marginable securities.

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The sale of an existing position may satisfy a day trade call but is considered a Day Trade Liquidation. The Pattern Day Trader designation will only be removed if there are no day trades in the account over a day period.

What is a cash account? A cash account is defined as a brokerage account that does not allow for any extension of credit on securities.

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