For years, smaller retail traders lived under one of the most frustrating rules in U.S. markets: the infamous $25,000 pattern day trading (PDT) requirement. If your account didn’t clear that hurdle, you were capped at three round-trip trades every five business days, unless you wanted to risk a margin violation and a frozen account.
That wall may finally be crumbling.
Here’s what you need to know.
1. The Old Rule, Built in the Dot-Com Era
Back in 2001, regulators dropped the PDT rule in response to the internet bubble. The thinking was simple: keep small traders from blowing themselves up chasing volatile tech stocks. To day trade actively, you had to park $25,000 minimum equity in a margin account, a huge ask for most retail investors.
Fast forward two decades, and that threshold has become one of the most debated rules in U.S. finance. Critics say it punished small accounts, pushed traders offshore, and never truly stopped reckless trading.
2. What FINRA Just Approved
FINRA has voted to scrap the $25K minimum equity rule for pattern day trading and replace it with intraday margin rules tied to actual exposure.
The change is still pending SEC approval, but if finalized, it would open the day trading door for smaller retail accounts.
— #Wall St Engine (#@wallstengine)
7:33 PM • Sep 24, 2025
On Tuesday, FINRA voted to scrap the fixed equity threshold. In its place: an intraday margin rule. Instead of a blanket $25K requirement, traders’ buying power will be determined by the same maintenance margin standards that already apply to positions held overnight.
In practice, this means your risk limit depends on the positions you actually take, not an arbitrary account minimum.
The decision now heads to the SEC for final approval. If cleared, it could reshape the landscape for smaller active traders.
3. Why This Matters for us Retail Traders
For the first time in 20+ years, active trading may actually be accessible without a five-figure balance. Smaller accounts could scale intraday strategies more freely, especially in fast-moving markets like options.
It could also encourage more participation on platforms, which already saw its shares jump after the news. For brokers, this change likely means higher volumes, more commission flow, and more active clients.
4. A Sign of the Times
This overhaul reflects how much the market has changed since 2001. Technology has leveled the playing field: zero-commission apps, fractional shares, and real-time data feeds mean retail now trades in an environment that looks nothing like the early dot-com era. Regulators are finally catching up.
My Takeaway
If the SEC signs off, this could be one of the most transformative shifts for retail access in decades. But access cuts both ways. More freedom means more responsibility, margin is still margin, and risk is still risk. The training wheels may be coming off, but whether traders use that freedom wisely will decide who wins and who blows up.