In the US market, intraday trading is illegal if you do not maintain an equity balance of at least $25,000 in the trading account. The U.S. Securities and Exchange Commission (SEC) has imposed these restrictions on any trade that is opened and closed within the same day. This means that if you want to do intraday trading in the US stock market, having an equity balance of $ 25,000 is compulsory.

According to SEC, the day trading pattern is four or more trades within the five trading days. So, if you are taking 4 or more traders regularly, you will be classified as a trader. To put it in simple words, even a single trade taken every day would classify you as a pattern day trader and the capital restrictions would be applicable. Therefore, it is always advisable to maintain a balance of $ 25,000 equity balance to day trade.

Suppose the trader does not have the required $25,000 balance on the day they take a day trade. Here they would be prevented from taking any further day trades. The us market opening time in such a situation would remain unavailable until the account is increased to $ 25,000.

You must remember that the $ 25,000 equity balance restriction applies only in the US market. If done without the balance, it would not be legal. Day trading without the appropriate balance is illegal in order to prevent price manipulation and volatility in the stock prices during the day. It is also illegal in order to avoid a high leverage position in the market.

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