How to Remove Pattern Day Trader Status on Robinhood

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If you use Robinhood for investing, you may be wondering how to disable the pattern day trade protection. This feature allows you to monitor how many transactions are made that fall into the day trading category.

This guide will teach you how to remove pattern day trader status on Robinhood in just a few clicks – as well as other valuable information about these regulations.

How to Remove Pattern Day Trading Protection in the Robinhood App

The process for how to remove pattern day trader status on Robinhood is simple.

Follow these four steps to enable – or disable – the feature in your app:

  • 1

    Open your account details by clicking the icon in the bottom corner

  • 2

    Select account summary

  • 3

    Choose day trade settings to display the available options

  • 4

    Toggle the Pattern Day Trade Protection button to disable the feature

What is Pattern Day Trader Protection?

So, what is the purpose of Robinhood’s Pattern Day Trader Protection? This feature is designed to help you monitor your day trades so that you can remain compliant with all regulations.

While the Pattern Day Trade Protection feature does not prevent you from making more than three day trades, it will alert you before you place your fourth. That will give you a chance to proceed with the trade or cancel it to avoid violations.

Robinhood Day Trading Rules

If you trade on Robinhood, you are required to follow their day trading rules. These regulations are set by FINRA, so they apply regardless of where you manage your portfolio.

You are limited to three day trades within a 5 trading day window – unless you had at least $25,000 in your account at the prior day's close. If you place the fourth trade, your account will be flagged as a pattern day trader.

When this happens, you must ensure that you have $25,000 at the end of the day if you want to continue trading the following day. If you do not meet the minimum equity requirement, you will receive a day trade violation and your account will be locked for 90 days.

You can remove this restriction by closing a trading day at or above $25,000, but frequent violations may cause the broker to limit your account activity to only closing positions.

Day Trading Minimum Equity Requirement

If you wish to engage in regular day trading, you must have $25,000 in your margin account.

You must meet this $25,000 minimum before any day-trading occurs, and you must always maintain this level of equity. Even though your account may fluctuate throughout the day, what matters is the closing balance.

Note that this minimum equity does not consider any cryptocurrency. You can only use the cash, stocks, and options in your account to satisfy the $25,000 rule.

Do These Rules Apply to Options Trading?

Options trading must occur in a margin account. As a result, the day-trading rules will also apply here. If you buy and close out the same option position during a trading day, it will count towards the limit for pattern day trading.

Does the Rule Affect Short Sales?

A short sale is a position that requires an investor to borrow shares to sell them. In this scenario, the investor believes the shares will decrease in value, so the goal is to buy them back at a lower price when it is time to return them.

Short sales must be completed in a margin account. That means the pattern day trading rules will apply if you sell short and buy to cover that position within the same day.

FAQs

Can I still trade with a 90 day restriction Robinhood?

Yes. You are limited to 3 day trades within 5 trading days, unless you had at least $25,000 in your account at the close of the previous day. If you place a fourth trade, your account will be marked as a template day trader.

How long do restrictions last on Robinhood?

The day trading limit is valid for 90 days.

How do I get rid of day trading restrictions?

If you need to disable this feature in the app, you need to log into your account and toggle the Pattern Day Trade Protection button.

What is a pattern day trader?

This term refers to an investor that makes four or more day trades within a five trading day window. These trades must be placed in a margin account.

What is a day trade?

Day trading involves buying and selling a stock – or opening and closing a single option – within one trading day.

How much do you need in a margin account to be able to day trade?

FINRA requires that your portfolio value remains at or above $25,000 if you wish to be a pattern day trader.

What types of trades are regulated by pattern day trading rules?

These requirements apply to all day trades made in a margin account, including stocks, options, and short sales.

Team that worked on the article

Oleg Tkachenko
Author and expert at Traders Union

Oleg Tkachenko is an economist-analyst and a risk manager with a practical experience of working in financial institutions for over seven years. Oleg specializes in the analysis of commodities, Forex, stock markets and non-standard investment markets (cryptocurrency, hypes, peer-to-peer lending). He holds a Master’s Degree from the Ukrainian Academy of Banking of the National Bank of Ukraine, Kharkiv Banking Institute. Oleg became an author for Traders Union in 2018; in 2020 he joined the TU’s team of financial experts.

At Traders Union, Oleg is involved in expanded reviews of brokerage companies, and in monitoring the relevancy of the information provided in them. He analyzes trading strategies and indicators, and prepares educational articles on the topic of finance. In addition, Oleg carries out expert research in the Forex and stock markets, and also binary options and cryptocurrency markets. In particular, he checks brokerage companies, studies their performance and growth, tests new services offered by brokers, software and the level of customer support.

Oleg’s motto: Information is a force that opens boundless opportunities, but requires relevancy!

Olga Shendetskaya
Author and editor at Traders Union

Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.

Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.

Olga’s motto: Do well and you’ll be well!