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I have done some trading in my time, and I wondered how to get around the Pattern Day Trader (PDT) rules (this does not directly relate to me because I prefer swing or long-term investing.)

I have briefly researched two ideas:

  1. Trading with an out-of-country broker.
  2. Using a cash account (opposed to a margin account)

What are the pros and cons of the two ideas?

Note: Please give your answer in a format that is readable and easy to understand.

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  • 2
    "Maybe use a table" ??
    – Cody
    May 11, 2021 at 19:23
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    What's PDT? Pacific Daylight Savings Time? Not all users here know all abbreviations used anywhere in the world; you might want to spell it out at least once.
    – Aganju
    May 13, 2021 at 4:19
  • @Cody Meta Stack Exchange: New Feature: Table Support
    – Flux
    May 13, 2021 at 8:37
  • 1
    sure, i just don't get what about this question makes a table especially useful in the answer...
    – Cody
    May 14, 2021 at 17:00
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    @RonJohn this law can only be broken by a brokerage firm, not the investor, so this question isn't about breaking a law
    – CQM
    Jun 1, 2021 at 14:56

1 Answer 1

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In many countries, brokers are regulated (for example, the SEC in the US and the FCA in Britain). In addition, in the US, there's SIPC insurance. Trading with an out-of-country unregulated broker is a major risk. What recourse will you have if they screw up or if they scam you?

In the US, there is no limit to how many day trades you can make in a cash account as long as you are using settled funds. The catch is that settlement is T+2 so your trade frequency will be limited unless you trade small.

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