Yes, day trading is allowed on Robinhood, but the number of day trades you can make depends on your account type and balance. If you use a margin account with less than $25,000 in equity, you’re limited to three day trades within any rolling five-business-day window. Go beyond that, and you’ll be flagged as a pattern day trader, which locks your account from making further day trades until your balance meets the threshold.
The Pattern Day Trader Rule
A day trade is any time you buy and sell (or sell short and buy to cover) the same security on the same trading day. The pattern day trader (PDT) rule is a federal regulation from the Financial Industry Regulatory Authority (FINRA) that applies to all U.S. brokerages, not just Robinhood. It says that if you execute four or more day trades in a five-business-day period using a margin account, you’re classified as a pattern day trader and must maintain at least $25,000 in account equity.
If your account drops below that $25,000 minimum after being flagged, your ability to place new trades gets restricted. You’ll generally need to deposit enough funds to bring your equity back above the threshold or wait for the restriction period to expire before you can trade freely again.
How Robinhood Tracks Your Day Trades
Robinhood has a built-in day trade counter so you can see exactly how many day trades you’ve used in the current five-day window. To check it, go to Account, then select Menu or Settings, tap Investing, and look for “Day trades.”
The app also offers a feature called Pattern Day Trade Protection. When it’s turned on, Robinhood will alert you before you place a fourth day trade within the rolling window. At that point, you can either proceed with the trade (accepting the PDT designation) or cancel it to stay under the limit. You can toggle this setting on or off under Account, then Settings, then Investing, then Day trade settings. If you’re trading with a smaller margin account, keeping this protection on is a simple way to avoid accidentally locking yourself out.
Using a Cash Account to Avoid the Limit
The PDT rule only applies to margin accounts. If you switch to or open a Robinhood cash account, you can make unlimited day trades regardless of your account balance. There’s no three-trade cap and no $25,000 requirement.
The tradeoff is settlement time. When you sell a stock or option in a cash account, the proceeds take one trading day to settle. Until those funds settle, you can’t use them to buy something else. So while there’s no legal cap on how many day trades you place, your actual trading frequency is limited by how much settled cash you have available. If your entire balance is tied up in unsettled funds, you’ll have to wait a day before you can trade again.
For someone with a smaller account who wants to day trade more than three times a week, a cash account is the most common workaround. You just need to plan around the settlement cycle and avoid using unsettled funds, which Robinhood will flag as a good faith violation.
Crypto Trades Are Different
Cryptocurrency is not classified as a security under the same FINRA rules that govern stocks and options. That means crypto day trades on Robinhood do not count toward your pattern day trader limit. You can buy and sell Bitcoin, Ethereum, or any other supported crypto as many times as you want in a single day without triggering the PDT flag, regardless of your account balance or type. Crypto also settles differently than equities, so the one-day settlement constraint that affects cash accounts doesn’t apply the same way.
What Happens if You Get Flagged
If you place that fourth day trade in a margin account without $25,000 in equity, Robinhood marks your account as a pattern day trader. Once flagged, you won’t be able to place new day trades until your equity is at or above $25,000. You can bring your account into compliance by depositing additional funds or by simply not day trading and waiting for the restriction to lift.
The PDT flag doesn’t prevent you from holding positions overnight or making regular (non-day) trades. It specifically restricts same-day round trips. And once you’ve been flagged, the designation can stick for a period even if you reduce your trading activity, so it’s better to avoid triggering it in the first place if you don’t plan to maintain the $25,000 minimum.
Choosing the Right Setup
Your best approach depends on how much capital you have and how frequently you want to trade. If your account holds $25,000 or more, you can day trade as much as you want in a margin account with no restrictions. If you have less than $25,000 and want to day trade regularly, switching to a cash account removes the PDT cap but introduces the settlement delay. And if you’re primarily trading crypto, the PDT rule doesn’t apply at all.
Robinhood’s default account type for new users is typically a margin account (labeled “Instant”), which gives you immediate access to deposited funds but subjects you to the PDT rule. You can downgrade to a cash account through the app’s settings, though doing so means you lose instant deposit access and margin borrowing. For anyone focused specifically on day trading with a smaller balance, that’s often a worthwhile trade.