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.