US retail traders can now make unlimited day trades with far smaller accounts after FINRA’s pattern day trader rule ended on June 4.
For 25 years, the rule forced traders with margin accounts to keep at least $25,000 in equity if they made four or more day trades within five business days. A day trade means buying and selling the same stock or equity option in one session.
Why the Old Rule Mattered
The rule dates back to 2001, after the dot-com crash. Regulators wanted to limit risky short-term trading and make sure brokers had enough collateral behind accounts. Over time, retail traders argued that it became an unfair barrier for smaller accounts.
That barrier is now gone. Under amended FINRA Rule 4210, brokers no longer need to label users as pattern day traders or block them for crossing a trade-count threshold.
Instead, firms must monitor margin risk during the trading day. If a trader’s account falls below required levels while positions are open, the broker can restrict new trades or issue a margin call.
The change does not remove all limits. Traders still need at least $2,000 to use a margin account under Regulation T. Accounts below that level must follow cash-account rules, which require settled cash before new trades.
Small Traders Get More Access, But More Risk Too
Brokers are rolling out the change at different speeds. Robinhood, Webull, tastytrade, and TradeZero moved on June 4. Schwab’s thinkorswim follows on June 8, while E*TRADE, Fidelity, and Interactive Brokers are expected to move later.
The change matters most for small stock and options traders. Crypto traders are largely unaffected because spot crypto was never covered by FINRA’s stock margin rules.
Access is wider now, but the risk remains. Day trading still exposes small accounts to fast losses, leverage pressure, and intraday margin calls. The old $25,000 wall is gone. The discipline problem is not.
