Hey JasonW...

When you are labeled as a Pattern Day Trader and you begin the day with $25,000 or more in account equity, you are granted Day Trading Buying Power (DTBP) in accordance with industry guidelines. This figure is four times your NYSE excess based on the previous day's closing figures. You can trade using these funds, but there are some stipulations for utilizing this additional buying power.

• Day Trading Buying Power as calculated can only be used intra-day.
• Positions purchased using day trading buying power must be closed by the close of the market on the same day.
• You may still hold positions past market close if their aggregate value does not exceed your regular buying power.
• Exceeding your Day Trading Buying power will result in a Day Trading Call which must be met promptly, and before you engage in further Day Trading.

The risk of using DTBP is not adhering to the above rules, which would result in a call or possibly a restriction on your account. As with using regular buying power, you are only charged margin interest on debit balances held overnight. If you follow the above rules, you would never be holding more positions overnight than your regular buying power, so really that is no different than when you didn't have DTBP. Please review the below link on our site to read about Day Trading and how it affects your account. There is also a link on this page to FINRA's website and their explanation of Day Trading. If you have any further questions, give us a call and we can go over everything with you.

TradeKing does not promote day trading.

Chris Lebhar
TradeKing Customer Service Representative