If i buy 10 share of a stock today at 10:00am and later sell 8 share of dame stock at 11:00am it will be counting as a day trade


Aime
Yes, the transaction you described would be considered a day trade. Here's why:
- Definition of Day Trade: A day trade occurs when an investor buys and sells (or sells and buys) the same security within a margin account on the same day12. In your case, you bought 10 shares of a stock and then sold 8 shares of the same stock on the same day, which meets the definition of a day trade.
- Pattern Day Trader Rule: According to FINRA rules, if you execute four or more day trades within five business days, your account will be flagged as a pattern day trader account13. Since you engaged in one day trade (buying 10 shares) and then another day trade (selling 8 shares), this brings your total to two day trades in a single day, which is within the threshold for being classified as a pattern day trader.
- Minimum Equity Requirement: If your account is flagged as a pattern day trader, you are required to maintain a minimum equity of $25,000 in your margin account on any day that you day trade15. Since you have not mentioned maintaining this minimum equity, it is not clear whether your account would be subject to this requirement.
- Day Trading Buying Power: Even if you do not meet the minimum equity requirement, your brokerage firm may have established a day trading buying power limit for your account, which is typically based on your account's maintenance margin excess6. If you exceed this buying power, your firm may issue a day-trading margin call, requiring you to deposit funds to meet the call within a specified time frame.
- Implications of Day Trading: Being classified as a pattern day trader can have implications for your account, including the need to maintain a minimum equity level and potential restrictions on trading if you fail to meet these requirements15. However, it is important to note that day trading can be a risky strategy and may not be suitable for all investors. It is essential to consider your own financial situation, risk tolerance, and investment goals before engaging in day trading activities.
In summary, your described transaction would be counted as a day trade, and if it occurs within a five-day period that includes four or more day trades, it could potentially lead to your account being classified as a pattern day trader, which carries specific regulatory requirements and potential trading restrictions.
Source:
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1.
Day Trading FINRA.org
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