What is the pattern day trader (PDT) rule?

The PDT rule applies to U.S. margin accounts with less than $25,000. If you execute four or more "day trades" (buying and selling the same security within the same day) within five business days, you are flagged as a pattern day trader and restricted from day trading until your account reaches $25,000. Cash accounts and accounts over $25,000 are not subject to this restriction.