Although I haven't done this myself, I think you can sort of sidestep this by transferring the required funds into your account when your broker notices it and transferring them back out after a couple of days. Also, if I remember correctly, the rule only applies to trading on margin, so I believe you can daytrade however much you want with whatever account size you want as long as you never trade on margin. This does restrict you to only long trades though. I am by no means an expert on this though, so I could be wrong on this. Personally I find this rule very stupid.
Yes i heard this can be done in a cash account not sure though , but what i am sure about is in a cash account you should be wary to not use unsettled funds for this . - T+3 - .
From a broker's site :
"Simply put, if you have settled funds in your account at the start of day, you may use it for a purchase; alternatively, if you have unsettled funds in your account or if you sell a position to generate additional funds, you may use those funds as well, so long as you then hold the new position through the settlement of the positions liquidated to make the purchase. If you sell the new position before this occurs, this results in a good faith violation. If the new position is held through settlement, no violation occurs. It should be noted that the violation occurs only if you prematurely SELL the NEW position.
Two examples:
1) A customer starts on Monday with 100 shares of XYZ long in a cash account with no cash credit available for use. On Monday, 100 XYZ shares are sold for $1,000 and 500 ABC shares purchased for $1,000. On Wednesday, 500 ABC shares are sold for $1,200. This results in a ?good faith violation?. If the customer had held the ABC shares until Thursday, or if funds are received prior to settlement of the ABC shares, no violation occurs.
2) $5,000 due to be available on Wednesday and $5,000 pending settlement on Friday. On the prior Monday, the customer buys $10,000 worth of ACME. If the ACME shares are sold on Wednesday or Thursday, a good faith violation for $5,000 occurs. This is due to the fact that $5,000 is still pending settlement until Friday. If the sale were to occur on Friday or later no violation exists.
STRIKE POLICY
There is a three strike policy for Good Faith Violations. Customers will be allowed two good faith violations in a twelve month rolling period with no penalty. A third violation will result in the account being placed on 90 day restriction. If a violation occurs during the restriction period, the account will be allowed closing transactions only for a period of 90 days."
