The Pattern Day Trader Rule in 2026: What Applies Now and What Changes

Where the rule stands in October 2026

The PDT rule was part of FINRA Rule 4210, the margin rule that every FINRA-member broker in the US must follow. In December 2025 FINRA filed a proposal with the SEC to replace its day trading provisions, and the change has since been approved and taken effect:

What this means for you right now: the rule itself changed on June 4, 2026, but FINRA says your firm might keep operating under the old day trading margin requirements during the transition or move to the new ones sooner. Some large brokers announced changes starting in June 2026; others may use the full window. Your broker's own rules (its "house" requirements) can also be stricter than FINRA's minimum. The only way to know what applies to your account is to ask your broker or check its margin disclosures.

What counted as a day trade

Under the old rule, which still matters if your broker hasn't switched yet, a day trade was buying and selling, or selling and buying, the same security on the same day in a margin account. It applied to stocks and to options.

• Buy 100 shares in the morning and sell them in the afternoon: 1 day trade.
• Sell a stock short at 10 a.m. and buy it back at 2 p.m.: 1 day trade.
• Buy on Monday and sell on Tuesday: not a day trade, because the position was held overnight.

Brokers can use a broader definition than FINRA's minimum, so the way they count partial fills or several orders on the same stock can vary. If you're near the limit, check your broker's day trade counter rather than counting from memory.

The old rule: 4 day trades in 5 business days and $25,000

Under the PDT rule, you were a pattern day trader if you made four or more day trades within five business days in a margin account, as long as those day trades were more than 6% of your total trades in that account during the same five days. A broker could also designate you if it knew or had a reasonable basis to believe you would day trade, for example because it had given you day trading training.

Once designated, you needed at least $25,000 of equity in the account before any day trading, and you had to maintain it at all times. The money had to be in that account; you couldn't combine separate accounts to reach it.

In exchange, a pattern day trader got day trading buying power of up to four times the maintenance margin excess at the previous day's close, for stocks. Example: you start the day with $30,000 of equity and no open positions, so your maintenance margin excess is $30,000. Your day trading buying power is $30,000 × 4 = $120,000. Brokers could set a lower limit.

The rolling window is what tripped up many beginners: it's five business days, not a calendar week. Three day trades between Wednesday and Friday plus a fourth on the following Monday or Tuesday all fall inside the same five-business-day window (assuming no market holidays).

What happened if you were flagged

• With $25,000 or more: you could keep day trading within your day trading buying power.
• With less than $25,000: you couldn't day trade in that account until you brought the equity back to $25,000.
• If you went over your buying power: the broker issued a day trading margin call. You had five business days to meet it; meanwhile your buying power was cut to two times your maintenance margin excess.
• If you didn't meet the call in five business days: the account was restricted to trading only on a cash available basis for 90 days, or until you met the call.

Many brokers also had their own procedures, for example for resetting or removing the flag. Those were company policies, not FINRA rules, and they vary from firm to firm.

Margin accounts vs cash accounts

The PDT rule only ever applied to margin accounts, the accounts where your broker can lend you money. A cash account had no day trade count, and that hasn't changed. What limits a cash account is settlement.

In a cash account you must pay in full for what you buy, and US stock trades settle on T+1, one business day after the trade. You can buy and sell a stock on the same day with cash that was already settled. But if you buy with money from a sale that hasn't settled yet and then sell the new position before that money settles, the SEC calls it freeriding, and your broker may have to freeze the account for 90 days. During a freeze, you must fully pay for any purchase on the trade date.

Example: you have $5,000 of settled cash. On Monday you buy and sell a stock with it: allowed. If you then use the $5,000 from that sale to buy another stock on Monday afternoon, you can't sell that second stock until Tuesday, when the first sale settles.

We compare both account types in detail in the guide cash vs margin account.

What replaces it: intraday margin requirements

Under the new standard, brokers no longer count your day trades. Instead they check whether your equity covers your positions during the trading day, applying the same maintenance margin rules that already applied at the end of the day.

• No $25,000 minimum and no PDT label. The trade count and the special minimum were removed.
• The $2,000 minimum stays. FINRA says $2,000 is still the minimum equity required for leveraged trading in a margin account. With less, you can trade only with your available cash.
• Maintenance margin all day long. FINRA's minimum is equity of 25% of the market value of long margin stocks, and it must hold throughout the day, not just at the close. Your broker can require more.
• Intraday margin deficit. If a purchase or short sale leaves your equity below what's required, you have a deficit that must be satisfied as promptly as possible, usually by depositing money or securities.
• 90-day restriction. If you make a practice of not covering deficits promptly and one is still unpaid at the close of the fifth business day, the broker must stop you from opening or increasing short positions or borrowing for 90 calendar days, or until you cover it. Small deficits (no more than the lesser of 5% of your equity or $1,000) don't count toward that practice.

Simplified example: you have $10,000 of equity and no positions, and your broker uses FINRA's 25% minimum. Buying $40,000 of stock requires $10,000 of maintenance margin, exactly your equity. Buying $48,000 requires $12,000, which leaves a $2,000 deficit that you'd have to cover. With a 30% house requirement, the same $48,000 position would require $14,400. If you keep a position overnight, the normal 50% initial margin rules for new purchases also come into play.

FINRA's rule lets brokers monitor positions in real time but doesn't require it; a broker can instead make a single calculation, for example at the end of the day, and then ask you to cover any deficit. Ask yours which method it uses.

How to work within the rules today

First step: ask your broker whether your account is on the old PDT rule or the new intraday margin standard, and what its house requirements are. Then:

• If your broker still applies the PDT rule and you have less than $25,000: keep to three day trades or fewer in any five-business-day window, hold some trades overnight instead of closing them the same day, or day trade in a cash account using only settled funds.
• If your broker already applies the new standard: leave a cushion between your equity and your margin requirement. Leverage that is technically allowed can still wipe out a small account quickly.
• In either case: size every trade by how much you can lose, not by how much buying power you have. See risk management.

FINRA itself says frequent trading strategies aren't for everyone and that buying on margin and shorting can make you lose more than your original investment. Removing the $25,000 minimum makes day trading easier to access; it doesn't make it less risky. Practice first on a demo account.