There is no statutory test. Case law looks for substantial, frequent, regular and continuous activity aimed at profiting from short-term price swings rather than dividends, interest or appreciation. Courts have weighed the number of trading days, trade frequency, holding periods, hours spent and the presence of a business-like setup.
Qualifying allows expenses such as data, platforms, education and home office to be deducted on schedule-c-trading-business rather than being non-deductible, and it is the gateway to the section-475-election.
What it does not do is change the character of trading gains by itself. Without the 475 election, gains remain capital and are reported on form-8949 and schedule-d, and trading income is not subject to self-employment tax.
General information for the United States, not tax advice. Rules change and depend on your circumstances; get professional advice on whether you qualify.
Related: section-475-election, schedule-c-trading-business, form-8949, capital-loss-limitation, estimated-quarterly-taxes