what is a pattern day trader 
according to finra rules a pattern day trader is any customer who executes four or more day trades within five business days provided that the number of day trades represents more than 6 of the customer s total trades in the margin account for that same five business day period brokerage firms can also use a broader definition classifying more customers as pattern day traders 6the bottom linebuying on margin can allow investors to reap greater gains on a percentage basis if the stock they buy goes up in value if it goes down however they may have to scrape up additional cash quickly before the broker sells off their stock while buying on margin can work for savvy and lucky investors it is risky and shouldn t be entered into by anyone unless they have sufficient cash on hand and can afford to lose it 