U.S. regulators end $25,000 minimum equity rule for day trading

U.S. regulators have removed the $25,000 minimum equity requirement that previously applied to accounts executing multiple day trades within a five-business-day window. The change ends the Pattern Day Trader designation that had restricted smaller accounts from frequent intraday trading in U.S. stocks.

Background on the former rule The requirement had been in place for more than two decades and applied only to margin accounts at brokerages. Accounts below the threshold were limited to three day trades in any rolling five-business-day period.

Scope of the policy change The elimination applies to stock trading and does not alter other margin or options requirements. Brokerage firms will now determine their own minimum balance policies for customers seeking to day trade.

“The SEC has officially eliminated the $25,000 minimum equity requirement for day trading." The rule change takes effect immediately for new trades.”

Market reaction and next steps Trading platforms are expected to update account interfaces and risk disclosures in the coming weeks. Individual investors previously restricted by the threshold can now place day trades without maintaining the prior equity level.