Effective Date: June 4, 2026
The SEC has approved amendments to FINRA Rule 4210 that eliminate the long-standing Pattern Day Trader (PDT) framework and replace it with a modern, real-time intraday margin system. The $25,000 minimum equity requirement for PDT accounts is being removed, day trades will no longer be counted, and your intraday buying power will be calculated dynamically based on your account's real-time margin excess.
What's Changing
What Is Being Eliminated | What Is New |
PDT designation — Accounts will no longer be flagged based on the "4-day trades in 5 business days" trigger. | No day trade limit — Day trade as frequently as your available buying power allows. |
$25,000 minimum equity requirement — The PDT-specific equity threshold is removed. | $2,000 standard margin minimum — The same minimum that applies to any margin account. |
End-of-day buying power calculation — Day-trading buying power will no longer be based on the prior-day closing balance. | Real-time intraday margin excess — Intraday Margin Buying Power updates dynamically as you open and close positions and now includes funds in sweep programs. |
90-day account freeze for PDT violations — The 90-day trading restriction tied to unmet day trade calls is eliminated. | 90-day account freeze for unmet IM Calls — An IM Call is issued going into the next day when an intraday margin deficit (IMD) is not satisfied; accounts that fail to meet the call within 5 business days face a new 90-day liquidation-only restriction. |
What This Means for You — by Account Type
If you have a margin account with $25,000 or more
Your day-to-day trading experience will be largely unchanged. The main differences are that the PDT flag will be removed from your account, the prior end-of-day-based buying power formula no longer applies, and buying power will update dynamically throughout the day.
If you have a margin account with less than $25,000
The four-day-trades-in-five-business-days restriction will no longer apply once Firstrade implements the new framework on June 4, 2026. Buying power will be determined by your intraday margin excess, and any existing PDT and day trade-related restrictions or liquidation-only flags will be lifted on June 4, 2026, as well.
If you have a cash account
Nothing changes. Cash accounts were never subject to the PDT rule, and all existing cash account rules continue to apply.
Frequently Asked Questions
When does the new rule take effect?
The new rule becomes effective on June 4, 2026, as confirmed by FINRA Regulatory Notice 26-10. Firstrade will implement the new framework on June 4, 2026.
Is there anything I need to do?
No action is required. Changes are applied automatically to your account.
Do I still need $25,000 to day trade?
No. Once the new rule is in effect at Firstrade, the $25,000 minimum equity requirement for day trading will no longer apply. Your margin account is only required to maintain the standard $2,000 minimum equity.
Can I day trade with $500 in a margin account?
The standard margin account minimum is $2,000. You need at least $2,000 in equity, and you must have sufficient margin to cover your positions.
Is there a limit on how many day trades I can place?
No. The "four-day trades in five business days" trigger is eliminated. You may open and close positions intraday as often as your account's available buying power allows.
What happens to my existing PDT flag?
Starting June 4, 2026, existing PDT designations will be removed, and accounts that are currently restricted because of PDT status and day trade calls will no longer be subject to those restrictions.
What is Intraday Margin Buying Power (IMBP)?
Intraday Margin Buying Power (IMBP) is the buying power available to your margin account during the trading day, calculated in real time rather than from the prior day's closing balance. It is based on your account's real-time margin excess (your equity minus the margin required for current positions) and an intraday multiplier that may vary based on the security traded. IMBP includes cash held in the FDIC sweep program.
What if I get an intraday margin call?
Under the new rules, intraday margin calls (IM Call) must be satisfied by the 5th business day (T+5). The call can be met by depositing funds. Accounts that fail to meet the call within 5 business days may face a 90-day liquidation-only restriction.
Does this affect options trading?
Day trading options previously counted toward the PDT threshold, just like stock day trades. Starting June 4, 2026, those trades will no longer trigger a PDT designation or related account restrictions. Your existing options approval level and standard options margin requirements continue to apply.
Note: The new Intraday Margin Buying Power can be applied to marginable securities; long options are not marginable.
Disclaimer: This article is provided for informational purposes only and does not constitute investment, tax, or legal advice. Day trading involves substantial risk and is not suitable for all investors. You may lose more than your initial investment when trading on margin. Please ensure you understand the risks before engaging in day trading activity.