Common use of Prohibition of Pattern Day Trading Clause in Contracts

Prohibition of Pattern Day Trading. As a holder of an “Instant Deposit” account, Customer may not engage in “pattern day trading.” Pattern day trading occurs when Customer initiates four or more day trades within five business days, provided the number of day trades are more than six percent of Customer’s total number of trades for that same five day period. A day trade occurs when Customer buys and sells, or sells and buys, the same security on the same day. Engaging in pattern day trading may result in suspension, deactivation, or closure of your Customer Account. FTX may institute trade restrictions to prevent pattern day trading at any time without notice to Customer. Specifically, FTX will monitor Customer Account trading activity and will provide Customer with explicit notice to the extent that Customer engages in three day trades within a five business day period. Customer will be prohibited from placing a fourth day trade in a five business day period. If Customer attempts to place a fourth day trade in a five business day period, FTX will present Customer with a notification indicating that Customer may not execute a day trade until the expiration of the relevant five business day period. Customer will be presented with two options: (1) to wait to place the relevant trade after the expiration of the relevant five business day period, or (2) to place a queued order that will be executed as soon as the relevant five business day period expires, as further indicated and clearly explained to customer within such notice.