Skip to main content

Day Trading

Updated this week

What is a day trade? 

A day trade occurs when you buy and sell (or sell short and buy to cover) the same security within the same trading day. Trades executed during Overnight and Extended Hours on the same trading day are also considered day trades.

The trading day runs from 8:00 PM ET on the previous day to 8:00 PM ET on the same day.

How are day trades counted?

Day trades are counted based on the opening position and whether it is closed on the same trading day. Trades executed between 8:00 PM ET and 12:00 AM ET are considered as part of the next day. Holding a position until the next trading day and closing it before opening a new position in the same security is not considered a day trade.

Note: Opening an Option Spread and Closing as a Spread same day is considered 1 day trade.

Examples for Day Trade Count

Scenario 1:

Beginning of Monday, you own 0 shares of ABC stock.

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 50 ABC (8:00am-8:00pm)

Number of Day Trades: 1

Scenario 2:

Beginning of Monday, you own 0 shares of ABC stock.

  • Buy 50 ABC (8:00am-8:00pm)

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 100 ABC (8:00am-8:00pm)

Number of Day Trades: 1

Scenario 3:

Beginning of Monday, you own 0 shares of ABC stock.

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 25 ABC (8:00am-8:00pm)

  • Sell 25 ABC (8:00am-8:00pm)

Number of Day Trades: 1

Scenario 4:

Beginning of Monday, you own 0 shares of ABC stock.

  • Buy 50 ABC (8:00am-8:00pm)

  • Buy 25 ABC (8:00am-8:00pm)

  • Sell 50 ABC (8:00am-8:00pm)

  • Sell 25 ABC (8:00am-8:00pm)

Number of Day Trades: 1

Scenario 5:

Beginning of Monday, you own 0 shares of ABC stock.

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 50 ABC (8:00am-8:00pm)

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 50 ABC (8:00am-8:00pm)

Number of Day Trades: 2

Scenario 6:

Beginning of Monday, you own 50 shares of ABC stock.

  • Sell 50 ABC (8:00am-8:00pm)

  • Buy 50 ABC (8:00am-8:00pm)

Number of Day Trades: 0

Scenario 7:

Beginning of Monday, you own 50 shares of ABC stock

  • Sell 50 ABC (8:00am-8:00pm)

  • Buy 50 ABC (8:00am-8:00pm)

  • Sell 50 ABC (8:00am-8:00pm)

Number of Day Trades: 1

Did this answer your question?