How Intraday Margin Replaced the Pattern Day Trading Rule

• FINRA has eliminated the Pattern Day Trader (PDT) rule. The SEC approved the change on April 14, 2026.
• Trade counting is replaced by intraday margin: whether the account has enough equity to cover its positions during the day.
• The $25,000 PDT minimum is gone. The $2,000 minimum for using leverage remains.
• Maintenance requirements don't change: generally 25% for long, margin-eligible stocks, and higher at many brokers.
• There is no new universal multiplier. Four-to-one intraday buying power is not guaranteed.
• Brokers calculate intraday margin differently: in real time, at the end of the day, or both.

The Financial Industry Regulatory Authority (FINRA) eliminated the Pattern Day Trader rule after the Securities and Exchange Commission approved the change on April 14, 2026.

The basic change is simple: stop using the number of trades as a substitute for risk and start measuring whether an account has enough equity to support the positions it carries during the day.

Under the old system, an account could be labeled a pattern day trader after making four or more day trades (buying and selling the same securities on the same day in a margin account) within five business days if those trades made up more than 6% of its total trading activity during that period.

That label generally required the account to maintain at least $25,000 in equity to continue day trading. Buying power was normally limited to four times the account’s maintenance-margin excess at the previous day’s close. Falling below the minimum could suspend day trading, while exceeding available buying power could trigger a margin call and additional restrictions.

Why Trade Count Was a Poor Measure of Risk

The problem was that trade count never measured actual risk very well. Four small day trades could trigger PDT, while one much larger position creating far more risk would not.

Once a brokerage firm switches systems, the PDT designation disappears. Instead, the firm starts calculating how much money the account needs to cover the risk from its trades throughout the day.

Key Terms: IML, IML-Reducing Transaction and IMD

The rule uses three terms that sound more complicated than they are:

1. Intraday margin level, or IML: How far an account is above or below its maintenance-margin requirement at any point during the day.
2. IML-reducing transaction: Any trade or withdrawal that lowers the account’s IML, including buying a security, opening a short position, or withdrawing cash or securities.
3. Intraday margin deficit, or IMD: The largest shortfall between the account’s equity and its maintenance-margin requirement, measured after an IML-reducing transaction during the day.

Maintenance Margin Requirements Haven't Changed

The regular maintenance requirements do not change. For most long, margin-eligible stocks, the FINRA minimum remains 25% of current market value. Brokerage firms can require more, and some volatile or non-margin-eligible stocks may carry requirements of 50%, 100%, or more. The higher the requirement, the faster a position consumes buying power.

Real-Time vs. End-of-Day Margin Calculations

Not every broker will handle margin the same way. Some will track it in real time and block a trade before it creates a deficit. Others will calculate it at the end of the day, while some may do both. The numbers on your trading screen will depend on how your broker handles it.

What Happens If You Have an Intraday Margin Deficit?

If a deficit occurs, your broker will require you to cover it as quickly as possible. Repeated failures can restrict new borrowing or short positions for up to 90 days. Your broker may also close positions without waiting for you to make a deposit.

The old “four-times” formula is not being replaced with another universal multiplier. The buying power shown on your screen will depend on your equity, open positions, maintenance requirements and your broker’s rules. At a firm using real-time controls, it can change as orders fill, prices move and profits or losses build. Even if that number is positive, you could still face a margin call if the market moves against you, or your broker requires more margin.

Regulation T Still Applies

Regulation T also remains in place. A brokerage firm can generally lend up to 50% of the purchase price of an eligible stock, although it may require more. The new rule does not guarantee four-to-one intraday leverage.

Futures accounts were never subject to FINRA’s PDT rule. Margin depends on what you are trading and how many contracts you hold, not how often you trade. Futures exchanges set initial and maintenance margin requirements, although brokers can require more and close positions if an account falls short. They may also offer lower intraday margin if positions are closed before a certain time, but those policies vary by firm.

The basic idea is the same: your account must have enough value to cover the positions you hold, even though stocks and futures calculate that amount differently.

Cash-account rules, settlement requirements, Regulation T, the $2,000 minimum for using leverage, maintenance margin, and broker house rules all remain. The $2,000 threshold applies before borrowing money, not necessarily when opening the account. Leverage is still limited by position size and required margin.

Bottom line: The old PDT rule asked, “How many day trades did you make?” Intraday margin asks, “Does the account have enough equity to cover its positions during the day?” Under the new system, keep enough equity in the account, and round trips are no longer the FINRA trigger.

Note: The removal of the PDT framework does not eliminate the risks of frequent trading or margin use. Margin requirements, buying power and broker restrictions vary, and losses from margin trading may exceed the amount initially invested.

Has the Pattern Day Trader rule been eliminated?

Yes. FINRA eliminated the Pattern Day Trader rule after the SEC approved the change on April 14, 2026, and the amendments to FINRA Rule 4210 took effect on June 4, 2026. The PDT designation, the four-day-trades-in-five-business-days test and the $25,000 minimum no longer apply. Margin is now measured by whether the account has enough equity to cover its positions during the day.

Is the $25,000 minimum for day trading gone?

Yes. The $25,000 pattern day trader minimum no longer applies. Other minimums remain: the $2,000 equity minimum still applies before you can borrow on margin, and your broker may set its own higher requirements.

What replaced the PDT rule?

An exposure-based intraday margin standard. Instead of counting day trades, the broker calculates how much equity the account needs to cover the risk of its positions during the day, and whether the account falls short of its maintenance-margin requirement after trades that reduce its margin level.

What is the intraday margin level (IML)?

The intraday margin level is how far an account is above or below its maintenance-margin requirement at any point during the day. It is the measure the new rule uses in place of counting day trades.

What is an IML-reducing transaction?

Any trade or withdrawal that lowers the account's intraday margin level — including buying a security, opening a short position, or withdrawing cash or securities.

What is an intraday margin deficit (IMD)?

The largest shortfall between the account's equity and its maintenance-margin requirement, measured after an IML-reducing transaction during the day. If a deficit occurs, the broker will require it to be covered as quickly as possible.

What happens if I have an intraday margin deficit?

Your broker will require you to cover it as quickly as possible, and it may close positions without waiting for you to make a deposit. Repeated failures to meet deficits can restrict new borrowing or new short positions for up to 90 days.

Can I still day trade with less than $25,000?

The $25,000 PDT minimum no longer applies, and the number of day trades is no longer the FINRA trigger; the question becomes whether the account has enough equity to cover its positions during the day. For day trading on margin, the $2,000 minimum still applies before borrowing, maintenance requirements still apply, and your broker's own rules may be stricter. A cash account remains subject to settlement rules.

Do I still get four-to-one intraday buying power?

Not automatically. The old "four-times" formula is not replaced with another universal multiplier, and the new rule does not guarantee four-to-one intraday leverage. Your buying power depends on your equity, open positions, maintenance requirements and your broker's rules, and at firms using real-time controls it can change as orders fill and prices move.

What is the maintenance margin requirement for stocks?

For most long, margin-eligible stocks, the FINRA minimum remains 25% of current market value. Brokers can require more, and some volatile stocks carry requirements of 50% or higher. Non-margin-eligible stocks require 100%. The higher the requirement, the faster a position uses buying power.

Does Regulation T still apply?

Yes. Regulation T remains in place, and a brokerage firm can generally lend up to 50% of the purchase price of an eligible stock, although it may require more.

How do brokers calculate intraday margin?

It varies by firm. Some track margin in real time and block a trade before it creates a deficit. Others calculate it at the end of the day, and some do both. The numbers on your trading screen will depend on which approach your broker uses; which is why it is worth asking your broker how it calculates intraday margin.

Does the new rule affect short selling?

Yes, in two ways. Opening a short position is an IML-reducing transaction, so it counts toward the intraday margin calculation just as buying does. And repeated failures to meet intraday margin deficits can restrict new short positions for up to 90 days; which matters for anyone who relies on short selling as part of their strategy.

Do hard-to-borrow stocks use more margin?

Short positions consume margin like any other position, and volatile or less liquid names can carry higher house requirements than the 25% FINRA minimum. On hard to borrow locates, check both the borrow cost and the margin requirement before entry; a higher requirement uses buying power faster, and under intraday margin that affects how much room the account has for everything else that day.

How is this similar to futures margin?

Futures accounts were never subject to the PDT rule. Futures margin depends on what you trade and how many contracts you hold, not how often you trade. The new stock rule follows the same basic idea; the account must have enough value to cover the positions it holds - even though stocks and futures calculate that amount differently.

What should a day trader do now that PDT is gone?

Ask how your broker calculates intraday margin, watch buying power and margin excess rather than trade count, check the maintenance requirement before entering, know how your firm handles intraday deficits, and leave a cushion. For a day trader, the practical shift is from managing how many trades you make to managing how much exposure each position creates; one oversized position can use more margin than several small trades.

Does the PDT change affect how I choose a broker?

It makes the broker's margin policies more important, not less. Real-time versus end-of-day calculation, house maintenance requirements above the FINRA minimum, and how intraday deficits are handled will all vary between firms. Alongside those, costs still matter: a low-cost brokerage keeps commissions and fees from eating into smaller, more frequent trades.

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