Day Trading Limits
What is a day trade?
A day trade is when you buy and sell the same stock on the same market day. Each time a stock is purchased and then sold on the same day, one day trade will have been created.
How are my day trades calculated?
When you buy stock using Cash App Investing, you are limited to 3 day trades within a rolling 5 day trading period.
For example: On Monday, you buy and sell ABC stock. That’d be your first day trade. Then, you buy and sell XYZ stock on that same day. That’d be your second day trade.
In this example, you would have 2 day trades and 1 more day trade remaining.
What if I reach my day trade limit?
If you exceed your day trade limit, you can still buy and sell stock as long as you’re not placing a day trade.
For example:
Monday: buy and sell ABC stock - 2 trades create 1 day trade
Tuesday: buy and sell EFG stock, buy and sell XYZ stock - these 4 trades total 2 day trades
Wednesday: buy ABC stock - 1 trade
In this scenario, you hit your day trade limit after buying and selling XYZ on Tuesday. Due to this limit, you could buy ABC on Wednesday, but wouldn’t be able to sell it until Thursday at market open.
The next day in which you could make another day trade - buying and selling the same share the same day - would be the following Monday.
How long do I have to wait until my day trade limit resets?
The rolling 5 day trading period is based on when the market is open (typically Monday through Friday, 9:30AM–4PM EST, excluding holidays).
It’s important to note that this rolling 5 day period is based on market days only; the weekend and holidays are not included in the rolling 5 day period. This means that a day trading limit can span separate weeks.
For example:
Tuesday: buy ABC stock, sell ABC stock, buy ABC stock, sell ABC stock - 4 trades total amounting to 2 day trades
Wednesday: buy and sell ABC stock - 2 trades total amounting to 1 day trade
In this example, the trader has reached their limit of 3 day trades with Tuesday being the first day of the 5 day rolling period. Since the stock market is not open on Saturday and Sunday, they are not included in this rolling period. The next day on which a day trade could be made is the following Tuesday, as it would occur just outside of your 5 day rolling period.