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TIAA and Citi Day Trading Rules in 2024
Does Citi and TIAA have PDT rule? Pattern day trading requirements for
accounts below $25,000. How many day trades do Citi and TIAA allow?
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The PDT Rule at Citi and TIAA... And How to Avoid It
Although Citi and TIAA don’t specialize in short-term trading, the brokerage firms do permit it. If you want to day trade inside your Citi or TIAA account, here’s what you need to know:
PDT Accounts and FINRA
Day trading within any US-based brokerage account is strictly regulated by FINRA, the primary regulatory body overseeing the securities industry in America. Essentially, FINRA requires any pattern day-trading account to maintain an account equity of at least $25,000. A pattern day-trading account is defined as:
An account that executes 4 or more security trades in a rolling 5-business-day period. Since securities include items like stocks, options, and ETFs (with bonds and options not offered at Citi), you’ll mainly be dealing with stocks and ETFs.
A margin account, as FINRA's PDT rules do not apply to cash accounts.
An account where total day-trading activity accounts for 6% or more of the account’s total trading activity.
Getting Around the PDT Rule on Citi
By understanding what defines a pattern day-trading account, there are several legal ways to bypass it:
One method is to use a cash account instead of a margin account, avoiding the $25k PDT requirement entirely. However, you will need to wait for funds to settle after trading since cash accounts do not provide leverage.
Alternatively, you could swing trade, which involves buying and selling within a two-week period and does not fall under the PDT rule, which only applies to same-day buying and selling.
If you're only making a few trades, keeping them under 6% of your total trading activity will also prevent your account from being classified as a PDT account.
Can Citi’s Software Be Used to Day Trade?
Day traders typically rely on advanced software to support their trading strategies. Unfortunately, Citi does not offer the sophisticated digital tools available with some other brokers. You won’t find desktop programs or a web-based platform here. Instead, Citi’s trading capabilities are available via a very simple interface on its website.
The order ticket at Citi is quite basic, offering only market and limit orders without the option for setting durations or stop losses. You can place a limit order for an exit after entering a position.
The broker’s mobile app mirrors the functionality of the website, offering the same simple order form.
Better Broker For Traders
For day traders looking for more robust options,
Webull is an excellent alternative to Citi and TIAA. Webull offers lower margin rates, virtual and crypto trading, and more sophisticated trading tools.
Webull Promotion
Open Webull Account
Updated on 8/7/2024.
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