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Charles Schwab Pattern Day Trading (PDT) in 2025
Pattern day trading rules at Charles Schwab. Pattern day trader PDT requirements and limits for
margin and cash accounts above/below $25,000 balance. Can you day trade on Charles Schwab?
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Pattern Day Trader at Charles Schwab
If you have a brokerage account with Charles Schwab, you’ll need to deposit $25,000 if your account is marked as a pattern day trading account. There are ways to avoid this, though. This article will show you how to day trade—legally—without needing to put $25,000 in your account.
The securities regulators in the United States have a rule called the PDT rule. It says that any brokerage account meeting the pattern day trading definition must have at least $25,000 in equity to keep day trading. If a PDT account doesn’t have this minimum, it can be frozen. That’s not good.
Even though Schwab did not create this rule, the broker must follow it because it is required to follow securities laws.
Schwab PDT Rule Justification
Why do the regulators have this rule? They think it protects investors from the risks of day trading. The idea is that only experienced investors would have $25,000 to put into a brokerage account.
Schwab PDT Rule Details
Luckily, there are ways to avoid the PDT rule. Here’s what it means:
I. The account must make at least 4 day trades (in stocks, options, ETFs, or other securities) in five business days.
II. The account must be a margin account.
III. The account’s day trades must make up at least 6% of its total trades.
If an account does not meet just one of these three conditions, it is not a PDT account and doesn’t need to worry about the $25,000 rule.
Free Charles Schwab Account
Visit Schwab Website
Strategies for Eluding the PDT Rule at Schwab
The first rule is 4 day trades. If your account makes fewer than 4 day trades in five days, it’s not a PDT account and you don’t need $25,000.
You can also open a cash account
instead of a margin account to avoid the PDT rule. Lastly, you can keep your total day trades below 6% of your total trades.
Schwab Day Trading Tools
Website
Schwab has many useful trading tools, and all of them are free. The broker’s website can place trades for many types of securities, like stocks, options, ETFs, and bonds.
There is a trade bar at the bottom of the screen. It shows market indexes and trading data for a selected ticker symbol. But you can’t place trades from the bar. If you click on the trade link, you will go to a page where you can submit the order. One thing we liked about Schwab's trade bar is the small pop-up chart with different time frames.
Full charts on the website have technical indicators, drawing tools, comparisons, and company event info. One thing we didn’t like is that you can’t make the chart as wide as the screen.
thinkorswim
If you want more features, you can download and install thinkorswim
for free. This program has much better charting. You can make the chart full screen, and change the colors. Price history can be set to show every tick.
One feature we liked is the Trade & Probability calculator that comes with the order ticket. It shows the risk-reward outcome at different dates, which you can change.
Other good features include Recognia for technical analysis, a security screener, and CNBC business news. thinkorswim also allows direct routing for orders.
Free Charles Schwab Account
Visit Schwab Website
Mobile App
If you are always on the go, you can manage your account and trade with Schwab's easy-to-use mobile app. It has helpful tools, including bill pay, check deposit, and transferring funds.
All your Schwab accounts—bank, futures, and securities—show up with just one login on the app. Tapping any account brings up a page with your holdings and a chart showing your day's gain or loss.
You can place orders for mutual funds on the app, which is nice because not all apps let you do that. You can also trade options, stocks, and ETFs.
Updated on 6/17/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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