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Written By: Ryan Scribner on Mar 18, 2023
» 4 min read
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Webull Pattern Day Trader (PDT) Rules Explained

If you're a day trader, you may have heard of the Pattern Day Trader (PDT) rule, which is a regulatory designation for investors who execute four or more day trades in a five-business-day rolling period using a margin account. Note that pre-market and after-hours trades count toward this total for PDT designation.

Webull, a popular online brokerage firm, has its own set of rules when it comes to PDTs.

In this article, we'll explain Webull's PDT rules and what happens if you violate them.

New to Webull? Check out my full tutorial below!

Pattern Day Trader (PDT) Rules Explained

If you're using a margin account, you need to be aware of the rules to avoid potential penalties. The PDT rule applies only to margin accounts with less than $25,000 equity; margin accounts with $25,000 or more have unlimited day trades, while cash accounts are not subject to the PDT rule but must consider unsettled cash restrictions.

Day trades are counted over a rolling five-business-day period, and both pre-market and after-hours trades count toward the total for PDT designation.

For margin accounts with less than $25,000 but more than $2,000, you can execute up to three day trades within any five-business-day period.

Understanding Different Types of Accounts and PDT Rules

Here's a summary of the PDT rules for different types of accounts:

  • Margin Account with Less Than $25,000: You can make up to three day trades in a rolling five-business-day period.
  • Margin Account with $25,000 or More: Unlimited day trades are allowed.
  • Cash Accounts: The PDT rule does not apply, but you must manage unsettled funds carefully to avoid Good Faith Violations.

Equity Maintenance (EM) Calls and Restrictions

Webull issues an Equity Maintenance (EM) call when the account equity falls below $25,000 as per FINRA rules. During an EM call, you are restricted from day trading until your account equity is restored to meet the $25,000 minimum.

If you complete a day trade while under an EM call, your account will receive a Day Trade (DT) call. Failing to meet this call can lead to account suspension or closure until both calls are met or until 90 days pass.

To meet the EM call, you can deposit cash or securities to get your equity above $25,000. The EM call amount will be the difference between $25,000 and your account equity value at the end of the day.

Webull will use the closing price of the regular session to calculate your equity. You must end the day above $25,000 for the EM call to be closed.

Webull One-Time PDT Reset

Webull offers a One-Time PDT Reset for your PDT violation, which can only be used once during the life of your account. This can be used strategically to regain day trading privileges if unable to meet the $25,000 equity requirement.

However, use this option judiciously, considering you only get one in the lifetime of your account!

FINRA Margin Call and Buying Power Rules

Pattern day traders have extended buying power, up to four times their maintenance margin excess. However, if they exceed this limit, they will receive a day-trading margin call and have five business days to cover it. If the call is not met within this timeframe, trading restrictions will tighten for 90 days or until the call is met.

Cash Account and Unsettled Funds Restrictions

In cash accounts, there is no PDT rule limit—day trading is unlimited—but traders must be cautious about unsettled funds and potential Good Faith Violations. These violations can cause restrictions or freezes if not managed properly.

Key Takeaways

  • Margin Account Restrictions: PDT rule applies to margin accounts under $25,000, allowing up to three day trades in a five-business-day period.
  • PDT Rule Exemptions: Margin accounts over $25,000 have unlimited day trades, and cash accounts are exempt from the PDT rule but must manage unsettled funds.
  • Equity Maintenance Calls: Fall below $25,000, and you will be restricted from day trading until your equity is restored.
  • One-Time Reset: Available for a fee to regain trading privileges if unable to meet the equity requirement.
  • FINRA Margin Calls: Exceed buying power limits, and you will face trading restrictions.

Practical Tips for Avoiding PDT Violations

To avoid PDT violations:

  • Track Trades Closely: Monitor your day trades to stay within the allowed limit.
  • Use a Cash Account: Consider using a cash account for more flexibility, but be cautious with unsettled funds.
  • Maintain Balance Above $25,000: Ensure your margin account never falls below the PDT threshold to avoid restrictions.

Final Thoughts

In conclusion, if you're using a margin account on Webull, it's crucial to be aware of the PDT rules and to maintain at least $25,000 of equity in your account at all times to avoid unnecessary penalties.

If you fall below the minimum equity requirement, you'll receive an EM call and won't be able to make any more day trades until you restore your account equity.

If you're unable to do so, you can use Webull's One-Time reset, but it comes at a cost.

As always, it's important to fully understand the rules and regulations of your brokerage firm to avoid any unnecessary penalties. Visit Webull's official resources for the latest updates on PDT rules and other trading guidelines.

Article written by Ryan Scribner
Ryan Scribner is the Co-Founder of Investing Simple and author of From Side Hustle To Main Hustle To Millionaire. He is also a host on the NerdWallet YouTube Channel and runs a successful personal finance YouTube channel he launched in 2016. Ryan has been featured in The Wall Street Journal, MarketWatch, Business Insider, and Forbes, which named his channel the #1 Must-Watch YouTube Channel for Making Money. Recognized as a Top 100 Money Expert by GoBankingRates + MoneyLion and selected again in 2025 — Ryan shares insights based on his own investing journey to help others build wealth.

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