# does pattern day trader rule apply to Canadian investors when trading US stocks?



## xyztrade (Dec 14, 2014)

searched the forum but couldn't find any relevant answer.

say if I open a tfsa account in US dollars with interactive broker, does this rule apply to Canadian traders when trading US stocks?

or does it vary with different brokers?


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## Nemo2 (Mar 1, 2012)

- Doesn't this just apply to margin accounts?

- Can you have a margin TFSA? (I wouldn't presume so, but it's not something I've investigated.)


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## avrex (Nov 14, 2010)

I don't believe any Canadian discount brokers follow the US FINA definition of 'pattern day trader'. 
Instead, our brokers each have their own margin rules.

However, our CRA could very well be interested in you, if you are frequent trader within your registered account.
i.e. If you've made a lot of money and have traded frequently, then they think you are a business and you need to declare your business income.

See the thread, 'CRA investigating large tfsa'.


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## xyztrade (Dec 14, 2014)

Nemo2 said:


> - Doesn't this just apply to margin accounts?
> 
> - Can you have a margin TFSA? (I wouldn't presume so, but it's not something I've investigated.)


-I overlooked "it only applies to margin accounts". however if I use margin to trade in US exchanges (shorting or options or any other instruments which requires margin), PDT rule would apply to Canadian traders?

- I dont think so. margin in essence is borrowed money. only connection i have seen was questrade can link tfsa to margin to increase margin purchasing power.


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## xyztrade (Dec 14, 2014)

avrex said:


> I don't believe any Canadian discount brokers follow the US FINA definition of 'pattern day trader'.
> Instead, our brokers each have their own margin rules.
> 
> However, our CRA could very well be interested in you, if you are frequent trader within your registered account.
> ...


I was just reading the thread as well. I think its really not fair for active traders.

So the large tfsa is the result of appreciated value in stock (can be sold as long as it stays in the tfsa account) + yearly room of contribution ?


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