DAY TRADE

FINRA rules define a “day trade” as the purchase and sale, or the sale and purchase, of the same security on the same day in a margin account.  This definition encompasses any security, including options.  Selling short and purchasing to cover a position in the same security on the same day is also considered a day trade.

Exceptions to this definition include:

  • a long security position held overnight and sold the next day prior to any new purchase of the same security; or
  • a short security position held overnight and purchased the next day prior to any new sale of the same security.

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