What is margin account?Margin Account

An account that lets you borrow money from your broker to buy shares, or borrow shares to sell short. It magnifies gains and losses, and if the account value drops below the maintenance level you have to add funds.

Learn “margin account” in an animated lesson

US Stock Rules
The PDT Rule: Limits on Day Trades
A margin account that makes 4 or more day trades in any 5 trading days is flagged as a PDT and needs at least $25,000 in account equity to keep going.

Related terms

day trading
cash account
good-faith violation
pattern day trader (PDT)

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Go to “The PDT Rule: Limits on Day Trades”