A client may be deemed a "Pattern Day Trader" by any of the following means:

1) Client executes four (4) or more day trades within five (5) business days. A day trade is opening and then closing a position in the same stock or option the same day. Note: When building a position in one security utilizing tow or more separate order tickets, day trades are counted based on the opening transaction. The following examples would be counted as two trades:

Example #1

Buy 100 shares @ 8:30am
Buy 100 shares @ 10:00am
Sell 200 shares @ 11:30am

Example #2

Sell Short 100 shares @ 8:30am
Sell Short 100 shares @ 10:00am
Buy to Close 200 shares @ 11:30am

2) Client states on the new account application "I do intend to use the account for day-trading purposes." (This is part of the Day-Trading Risk Disclosure Statement on the new account form)

3) Client advises firm either in writing or by e-mail that they intend to day trade.

A Pattern Day Trader is required to maintain a minimum $25,000 equity in their margin account. If the account equity falls below $25,000, an equity deficiency notice will be issued and the client will be required to deposit additional cash and/or securities to bring the account up to the $25,000 minimum account equity. Until the margin account reaches the $25,000 minimum equity, the account will be restricted and further day trading will not be permitted.

Once a client is deemed a "Pattern Day Trader," the client will always be deemed a pattern day trader unless the client notifies us in writing that they no longer intend to day trade. However, if the client then executes four (4) or more day trades within five (5) business days, the client will once again be deemed a "pattern day trader" and will be required to maintain $25,000.00 minimum equity or discontinue day trading.

If a Pattern Day Trader day trades in excess of their day trading buying power, Newedge USA, LLC will issue a day trading margin call. Until funds are received, the account will be restricted to day trading buying power of two times excess equity. If the call is not met by day five, the account will be restricted to cash available only for ninety (90) days or until the call is met. Funds deposited to meet the day trading call must remain in the account for at least two business days before they may be withdrawn.

Please note that while a Pattern Day Trader may day trade up to four (4) times their excess equity, if the client does not close the position the same day, the Regulation T Requirement for the transaction must be met. This means that although buying power for day trades is four (4) times excess equity, buying power for non-day trades is unchanged.

Although these recent regulatory changes now allow more leverage for certain day traders, clients should continue to make intelligent and informed investment decisions based on their investment objectives. For clients who elect to day trade please read the following disclosure.