The Pattern Day Trader(PDT) rules were put in place by FINRA to require minimum levels of equity be deposited and maintained in day trading accounts or you will be flagged as a “Pattern Day Trader.”
You will be flagged as a PDT if you execute more than 3-day trades within any rolling five trading day period. If you become flagged as a PDT you will be required to maintain a day trading minimum equity of $25,000. If you maintain this requirement you can continue trading as normal.
If you are flagged as a PDT and the account equity is below the SEC required minimum of $25,000 you will be issued a minimum equity call. You do not have to meet the call with funding but if you make a day trade while your account has an active call status then your account will be set to ‘Restricted – Closing Only’ status.This means you will not be able to initiate any new positions for 90 days. You will be able to close out positions that were open prior to the restriction.