A potential pattern day trader error message means that an account has less than the SEC required USD 25,000 minimum Net Liquidation Value AND the number of available day trades (3) has already been used within the last 5 days.

The system is programmed to prohibit any further trades to be initiated in the account, regardless of the intent to day trade that position or not. The system is programmed to protect the accounts with less than USD 25,000 so the account would not “potentially” be flagged as a day trading account.

If an account receives the error message “potential pattern day trader”, there is no PDT flag to remove. The account holder will need to wait for the five-day period to end before any new positions can be initiated in the account. It is not possible to override the “Potential Pattern Day Trader” restriction.

You can find an Overview of Pattern Day Trading (“PDT”) Rules on the MEXEM website.

See also: How can I determine the number of available Day Trades?

See also: Are non-US residents subject to the Pattern Day Trading Rule?