Fidelity Day Trading

Fidelity Pattern Day Trading (PDT) Limit. Can I Day Trade on Fidelity?


Pattern day trading rules at Fidelity. Active trader PDT requirements and limits for margin and cash accounts above/below $25,000 balance. How many day trades does Fidelity Investments allow.


Pattern Day Trading at Fidelity


If you want to day trade at Fidelity, but don’t have $25,000 to deposit in your account, keep reading. We’re going to show you how you can legally avoid this rule and day trade all you want with Fidelity’s software.


How Many Day Trades Does Fidelity Allow


Day traders in the United States must have at least $25,000 in any account that they use for day-trading purposes, unless they qualify for an exemption. This is an industry-wide policy that comes from the financial regulators. Although Fidelity is not the author of the rule, it is required to implement it. Thus, Fidelity customers who want to day trade will need to take notice of this important regulation.

The definition of a pattern-day-trading account is very clear:

- It must place 4 or more day trades of stocks, options, ETFs, or other securities in a week (or other 5-business-day duration).
- It must be a margin account.
- The number of day trades must add up to at least 6% of the account’s total trades.

Any account that does not meet all three attributes is not a pattern-day-trading (PDT) account and does not have to deposit $25,000.


General Strategy


Although the PDT rule is viewed as a nuisance by many day traders, it does have the advantage of providing several loopholes. You’re perfectly welcome by law to structure your trading to avoid meeting the definition of pattern day trader. If you do, Fidelity won’t require you to deposit $25,000 in your account.


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Ways to Bypass the PDT Rule


The first idea to avoid meeting the definition of a pattern day trader is to open a cash account instead of a margin account. Notice above that part of the definition of a PDT account is that it’s a margin account.

If you do decide to place your day trades inside a cash account, keep in mind that you won’t be able to trade with unsettled funds. Currently in the U.S., stock trades take two business days after the trade date to settle. So if you sold a stock or ETF on Thursday, funds wouldn’t be available until Monday.


Fidelity day trading


Another way to circumvent the PDT rule is to place 3 or fewer day trades per week. The PDT rule only kicks in at 4 trades or more; and it resets every 5 business days, so you’re free to day trade on a regular basis.

It’s also possible to avoid the PDT requirement by keeping the number of day trades below 6% of total trading activity inside the account. That would require a lot of regular trading; so most day traders won’t be able to use this loophole.


Alternative Broker For Traders


For active traders, a good alternative broker is Webull. It has a number of advantages over Fidelity: $0 commissions on options, lower margin rates, crypto trading, and virtual account.



Open Account



Open WeBull Account

Website Day Trading on Fidelity


Fidelity Investing Rating

During our appraisal, we found a user-friendly website inside Fidelity.com. We were able to navigate the site quite swiftly using the top menu (there are actually 2 rows) and a search field in the upper-right corner.


Fidelity website day trading


On the downside, there is no trade bar on the broker’s website; and we looked for, but couldn’t find, a browser platform. Nevertheless, trading is very straightforward with Fidelity’s pop-up trade ticket, generated after clicking on a sell or buy icon. It offers several order types and time-in-force choices. Bonds must be traded on web pages, and these offer another good trading experience.

Notes can be added to the website, and these are kept in a note list. Fidelity’s software offers the ability to create multiple watchlists. And alerts can be set according to many triggers and sent to email, to a cell phone as a text message, or to the broker’s trading platforms, discussed next.


Mobile App Day Trading on Fidelity


Fidelity App Rating

Fidelity has one mobile app. It does offer some very good trading resources, including the ability to buy and sell options and mutual funds. To log into the app, Face ID and Touch ID are available for Apple phones and tablets; although on the day we did our probing, Touch ID wouldn’t work even though we had it enabled. Kindle Fire and Android have apps as well.


Fidelity app day trade


We were impressed with the platform’s charting. A graph can be displayed horizontally, and there are many tools, such as technical studies and comparisons.

Besides charting, we also liked mobile check deposit, a funds transfer tool, streaming financial news in high definition, bill pay, and a PayPal transfer tool. Features we wanted to see on the app but didn’t find include Level II quotes and direct-access routing.


Desktop Day Trading on Fidelity


Fidelity Trading Rating

Fidelity customers who aren’t impressed with either the website or mobile app can download and install Active Trader Pro. The software is free for all customers, which wasn’t always the case.


Fidelity platform day trade


ATP has a lot of great features advanced traders will want to take note of. First is professional-level option trading. There are P&L graphs, a probability calculator, an implied volatility index, and a list of the largest trades during the day. Multi-leg derivative trades are already programmed into the platform, which makes entering complex trades faster and easier.

Charting on Active Trader Pro offers full-screen mode so users can zoom in and drill down on minute-by-minute price action. Graph styles include candlestick (hollow and filled), mountain, line, and point & figure.

ATP’s order form includes the same trade types available on the website. These include four trailing orders. Features missing on the website and mobile platform, such as Level II data and direct access to market makers, are available on Active Trader Pro.

Fidelity offers its desktop program with a demo mode for both guests and account holders.


Other Tools


Fidelity Tools Rating

Fidelity realizes the importance of technology for its customers in the 21st century; so it hasn’t stopped with Active Trader Pro. It also offers a smartwatch platform for Apple Watch. Alerts are displayed on it along with market indexes.


Fidelity day trading account


iMessage is an integrated feature for iPhone users. Amazon Echo users get a skill that can deliver market updates, stock quotes, podcasts, market movers, and even provide information about an account’s tax documents. Apple TV users get much more with Fidelity’s app.


About the Author
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.