Pattern day trading (PDT) is a regulatory designation by Financial Industry Regulatory Authority (FINRA). The brokerage's risk management system automatically designates account holders as PDT if they do a certain kind of trading. This designation applies to both traders and investors. As a trader or investor, if you make four or more day trading transactions within a span of five business days using a margin account, the system will flag your account as a pattern day trader.  If the broker's software assigns you the PDT designation, you must maintain a minimum balance of $25,000 in your margin account. The PDT system discourages investors from excessive day trading.