The US Financial Industry Regulatory Authority (FINRA) has voted to eliminate the long-standing $25,000 minimum equity requirement for pattern day trading, pending final approval from the Securities and Exchange Commission. The rule, in place since 2001, required traders to maintain at least $25,000 in a margin account to execute four or more day trades within five business days.
The change replaces the fixed threshold with an intraday margin framework, meaning traders’ buying power will now be tied to the margin requirements of positions taken during the day rather than a hard equity minimum. Regulators say the overhaul reflects the evolution of technology and market access since the early 2000s.
The decision lowers a major barrier for smaller accounts, potentially driving a surge in day trading and options activity, while providing a tailwind for brokers like Robinhood and other low-cost retail platforms.
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The biggest impact is access. Under the current $25,000 rule, small accounts are effectively shut out from making more than three day trades in five business days. Replacing this with an intraday margin framework means traders with far less capital can actively day trade, provided they meet margin requirements tied to their positions. This lowers the entry barrier dramatically for retail investors.
