What Counts as a Day Trade With Robinhood?

A day trade is when you buy and sell the same stock or open and close the same option contract/s within the same day of trading. Read further to find out more.

By Andia Rispah Igobwa

Edited by Taj Schlebusch

Published May 11, 2021

A day trade is when you buy and sell the same stock or open and close the same option contract/s within the same day of trading.
Otherwise, when you execute four or more day trades within five trading days, you become a pattern day trader. However, the number of day trades you do should represent more than 6% of your total trades within your margin during the same trading day period.
You are limited to a maximum of three-day trades in a five trading day period unless you hold at least %25,000 of portfolio value (less any cryptocurrency positions) in your Gold or Instant Account at the end of the previous day.
This means that if you place the fourth trade within the five trading day period, Robinhood will flag you as a pattern day trader, and you’ll have to have more than $25,000 in your portfolio value. It's worth noting that pattern day trading does not include cryptocurrency positions.
The portfolio value is the total of stocks, cash, and options that you have. Your portfolio may fluctuate during the trading day, but Robinhood only considers closing balances of the previous day.
Also, note that the five-day trading window does not align with the calendar week. For instance, Tuesday through Monday could be a five-day trading period.
The restriction can be removed if you close the trading day with more than the $25,000 closing balance requirement. However, frequent violations may cause your account to remain restricted, closing even if your portfolio value exceeds $25,000.