Understanding Day Trade Count and Pattern Day Trading with <$25K

Hi All,

Could someone help me understand a few things better around Pattern Day Trading rules. I understand that the PTD is enforcement when an account is not on margin due to having funding < $25K.

I did read this post to which user ShortStack had a nice summary here: Trying to understand day trading restrictions - #5 by John_Rowan

For clarification on my part using an example:

  1. If I buy a stock today 8/1 and then sell that same stock 8/2, this doesn’t count as a day trade correct?
  2. If I bought or sold stock in the same day and done so within a rolling 5 day business period, then I could reach up to 3 of those type of day trades within a rolling 5 days. In this case, does the following happen:
    – daytrade_count would go to 3? and stop at 3 because Alpaca will limit any further selling to prevent getting flagged to PTD, in other words, this should prevent “pattern_day_trader” from flipping to true. Is that correct?

The risk then is if a stock is selling off, then there is no way to liquidate the position as max day trades have been reached and could exceed more risk than initially planned for.

I would love it if there was an option for an all “cash account”.