Wells Fargo Day Trading

Wellstrade Pattern Day Trading (PDT) Limit. Can I Day Trade on Wells Fargo?


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



The Pattern Day-Trading Rule at Wells Fargo


Did you know that you can day trade at WellsTrade? Yes, it’s true. The brokers do permit this type of short-term trading. But you will have to follow some important guidelines to do it without having your account shut down. Here’s what you need to know:


PDT Rules from FINRA


The organization in the United States that’s primarily tasked with regulating day trading activities is FINRA, the Financial Industry Regulatory Authority. The basic requirement is that any account flagged as a PDT account must keep at least $25,000 in equity at all times.

And what exactly is a PDT account? According to FINRA, it:

1. Is a margin account (a cash account never qualifies as a PDT account)

2. Executes at least 4 trades of securities (stocks, bonds, funds, option contracts or other securities) in a five-business-day period.

3. Has day trades that result in at least 6% of the account’s total trading activity.


Circumventing the PDT Rule


To avoid the requirement to maintain $25,000 in account equity, you simply need to meet one loophole. For example, you could execute 3 security trades every week and no more. Or you could day trade forex, cryptocurrencies, or futures, which aren’t considered securities. Remember that the PDT rule only applies to securities.

Another good way to evade the PDT requirement is to day trade inside a cash account. This will entail its own drawback, though. This is the fact that you can’t trade with borrowed funds. With a cash account, you’ll have to wait for a trade to settle before you can trade with funds available from that trade.

With recent regulatory changes, stock trades now settle in T+2 (two business days after the trade date). Options and government bonds settle in T+1. So you’ll have to have some extra cash sitting in your account to actually day trade multiple times.

Another method to dance around FINRA’s pattern day-trading rule is to swing trade. This is entering a trade one day and exiting the next day or at some point within the next 2 weeks. The PDT rule doesn’t apply to this type of trading.

If you must day trade but simply don’t have the $25k to meet the PDT requirement, you could always open an offshore account that doesn’t have America’s rule. Taking this route does increase several risks that offshore accounts are known to have; so you should definitely proceed with caution if you make this decision.


Wells Fargo Options trading review


Using WellsTrade’s Software to Day Trade


WellsTrade doesn’t have any sophisticated software that day traders may typically want. There is no desktop program, browser platform, or even an advanced website. The broker’s trade ticket doesn’t offer bracket orders; so if you want to establish exit orders, you’ll have to enter those after your entry order.

After you place some day trades, there is no automated way to track whether you are close to becoming a PDT account. So you’ll need to manually keep track of your trades.


Better Broker For Traders


For active traders, a good alternative broker is Webull. It has a number of advantages over Wells Fargo: lower margin rates, $0 commission on all products, and advanced trading tools.



Open Account



Open WeBull Account


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.