The Rules on How Many Stock Trades I Can Make Online

Investors can feel overwhelmed by the number of federal agencies regulating stock trading.

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The number of online stock trades you can make depends on how much cash you have in your trading account or how much margin you broker is able to extend. Otherwise, there is no limit to the number of online stock trades you can make -- although you can run afoul of trading regulations that govern stock settlement deadlines, margin account minimums, and day trading rules.

Cash Accounts and Regulation T

If you trade with a cash account, your broker expects you to pay for the stock within three days of purchase. Until the payment settles, you are not supposed to sell the stock. If you sell the stock with the idea of using the sale proceeds to pay for the original purchase, this is known as "freeriding." If your broker catches you freeriding, he must freeze your trading account for 90 days per the Federal Reserve Board’s Regulation T. You can still trade during the 90-day freeze but you must immediately pay for any stock shares that you buy.

Margin Requirements

You can trade stocks by opening a margin account and depositing the required margin amount. Under Regulation T, you must deposit 50 percent of the stock’s purchase price for each stock trade you make. If another regulatory agency, such as the Securities and Exchange Commission or the Financial Industry Regulatory Authority, has a higher margin requirement, you must deposit the larger amount of the two. Your broker has the right to impose additional margin requirements above the regulatory authority’s required amount.

FINRA and Day Trading

You may fall under the Financial Industry Regulatory Authority's definition of a patterned day trader if you buy and sell the same security four or more times a day, for five business days or more. This includes selling short and buying back the same security. If the total number of those trades exceeds 6 percent or more of your total trading activity for that period, you are considered a patterned day trader. You do not have to be an active day trader to fall under this rule. Your broker can consider you a patterned day trader if you took a day trading course in preparation to day trade.

FINRA Patterned Day Trader Margin Requirements

Once you are identified as a patterned day trader, you must deposit and maintain a $25,000 balance in your trading account at all times. The $25,000 can be in cash, securities or a combination of both. If your account falls below $25,000, your broker will not allow you to trade until you bring your account back up to that level. Since it is a margin account, you can trade up to four times the amount in your brokerage account. If you have $30,000 in your margin account, for example, you can trade up to $120,000 per day as long as you maintain the $25,000 minimum margin amount.