PDT rule for UK traders

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ukstockbroke

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ive just been told by ibkr, that i can only do 3 trades per week with my 100% cash account of 2k.

I can go up to £5k but will anywhere let me trade multiple times a day? Im confused why PDT applies to cash isa accounts.

they said i need 25k to do multiple trades per day. that seems harsh - is this the true barrier to entry? Is every UK day trader using at least 25k?

Is there a work around?
 
The $25K account size has been in place since 2001 and is known at the "Pattern Day Trading" rule. If you have less than that in your account then you cannot day trade US stocks more than 3 times a week. It was less of an issue for UK traders before brexit when the exchange rate was much better for GBP/USD than it now is. If you are wanting to use a DMA broker there is not much choice to get around this that I know of.
 
Trader333 said:
The $25K account size has been in place since 2001 and is known at the "Pattern Day Trading" rule. If you have less than that in your account then you cannot day trade US stocks more than 3 times a week. It was less of an issue for UK traders before brexit when the exchange rate was much better for GBP/USD than it now is. If you are wanting to use a DMA broker there is not much choice to get around this that I know of.
Click to expand...

No. this was a UK stock on LSE. im aware of PDT but i dont understand why this applies to uk stocks , while using cash only?
 
Trader333 said:
It is probably best to ask IB directly why that is the case.
Click to expand...
Yeah i spoke to them on the phone and the woman just insisted, but im not 100% she knows what shes talking about bc it just doesnt add up logically.

hopefully someone from the UK will see this thread!
 
I think you're out of luck. There's no way out of PDT rule for IBUK accounts as they are introduced to and carried by IBLLC, a U.S. broker. If you were based in in Europe but outside the UK you could ask to get your cash account moved to IBIE, their Irish entity and the PDT rule will no longer apply.

NB, updated thread title to make it easier to find this information.
 
Sharky said:
I think you're out of luck. There's no way out of PDT rule for IBUK accounts as they are introduced to and carried by IBLLC, a U.S. broker. If you were based in in Europe but outside the UK you could ask to get your cash account moved to IBIE, their Irish entity and the PDT rule will no longer apply.

NB, updated thread title to make it easier to find this information.
Click to expand...
Thanks, Do you know if I can trade just UK stocks on LSE using margin with another broker? Since its LSE this has nothing to do with finra's pdt rule.
 
ukstockbroke said:
Thanks, Do you know if I can trade just UK stocks on LSE using margin with another broker? Since its LSE this has nothing to do with finra's pdt rule.
Click to expand...
I've never come across trading on margin on an ISA account. I found this old thread on reddit which reached the same conclusion:
https://www.reddit.com/r/UKPersonalFinance/comments/76xo98
The only thing you might be able to do is use a leveraged ETF within an ISA, depending on the broker.
 
ukstockbroke said:
ive just been told by ibkr, that i can only do 3 trades per week with my 100% cash account of 2k.

I can go up to £5k but will anywhere let me trade multiple times a day? Im confused why PDT applies to cash isa accounts.

they said i need 25k to do multiple trades per day. that seems harsh - is this the true barrier to entry? Is every UK day trader using at least 25k?

Is there a work around?
Click to expand...
I know this is a year late for you but maybe help others. So if you have 2k on your account and you can trade 5k you have margin account not cash. Cash account need 2 days to your money to settle on margin you can use after trade. Ib now under finra in the uk so everyone under pdt rule sadly. If you can, move your account to Ireland if you can or change broker to offshore like tradezero or capital Markets Elite Group. I hope this helps!
 
I can update a little as I hit the same issue. I'm UK. I was equally uncertain that the phone "help" at IBKR were confident in what they were saying (Indian call centre). IBKR tell me I can avoid PTD restrictions on a margin account if I deposit >$25k. I see elsewhere they pay interest so it may be OK to have cash sitting there.

You can get low fees, ISA accounts, and reasonable spreads on Trading212. No PDT rules apply. I don't use them for ISAs. On non Isas they have Cash and margin/cfd options, you'd have to check which things apply to their ISA accounts. EG you can have multi-currency accounts, but not sure if that applies to ISAS. The company is apparently run by unreliable forgetful and guess-prone chimpanzees in clown suits and the platforms are full of bugs, but good basics are there. They produce good data for recording/reporting your transactions too.
EToro appear to be more professional but their spreads are pretty awful. Not an issue if you trade infrequently of course. You have to convert to US$.
You can have trailing stops, free, on cash accounts, which can obviously be useful for some applications like shortish term investments. T212 don't, for cash. EToro have free copy-trading.
Swap fees on both are awful (think credit card rates), but don't apply to cash. (T212 calls Cash "Invest" rather than "CFD").
 
Are you sure that your account is a cash account?
It seems it's a margin account.
B/c PDT rule etc. does not apply to cash accounts.

But with a cash account one has to be careful not to do some other violations:
"Avoiding cash account trading violations"
www.fidelity.com

Avoiding Cash Account Trading Violations - Fidelity

If you're planning on actively trading, there are a number of rules that govern brokerage accounts. Learn more about the trading rules and violations that pertain to cash account trading. For example, cash liquidations, good faith violations, and free riding.
www.fidelity.com
 
Last edited:
What is PDT actually, I am new in stock trading and want to get more information about the terms used in stocks?
 
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