In order to day trade, the account must have at least 25,000 USD in Net Liquidation Value, where Net Liquidation Value includes cash, stocks, options, and futures P+L.
The NYSE regulations state that if an account with less than 25,000 USD is flagged as a day trading account, the account must be frozen to prevent additional trades for a period of 90 days. IB has created algorithms to prevent small accounts from being flagged as day trading accounts, to avoid triggering the 90 day freeze. IB implements this by prohibiting the 4th opening transaction within 5 days if the account has less than 25,000 USD in equity.
Previous day’s capital is calculated as at the close of previous day (16:15 EST). Previous day’s assets must be at least $25,000. Net credits and debits resulting in previous day’s capital becoming equal to or exceeding $25,000 after 16:15 EST of previous trading day are treated as adjustments of previous day’s capital, so that the investor can trade during the next trading day.