What Happened
FINRA’s Board of Governors voted to replace the current day trading and pattern day trading rules—including the $25,000 minimum equity requirement—with an intraday margin framework that would apply existing maintenance‑margin rules to a trader’s intraday exposure. This action is part of FINRA’s rule‑modernization effort and must still be filed with, and approved by, the SEC before it can take effect.
What Does (and Doesn’t) Change Today
Nothing changes for traders today. Until the SEC formally approves FINRA’s filing and an effective date is announced, the current $25,000 pattern day trader (PDT) requirement remains in force and day trading must be conducted in a margin account.
- This is a proposal that advances to the SEC. FINRA’s rule changes become effective only after SEC review and approval under Section 19(b) of the Exchange Act; you can track rule filings on FINRA’s public status page.
- Cobra Trading clients: Cobra Trading’s $30,000 account minimum remains in place as of today. This news does not change Cobra’s current account minimum or your existing platform risk settings.
What An “Intraday Margin” Approach Means in Plain English
Under the framework FINRA’s Board approved for SEC filing, your intraday buying power would scale with the risk of the positions you actually put on, rather than hinge on a fixed account‑equity threshold. In practice, your firm would calculate and enforce maintenance‑margin requirements throughout the day and limit leverage based on the characteristics of your intraday positions (e.g., volatility, concentration). FINRA’s release describes this as applying the existing maintenance‑margin rules “to intraday exposure.”
Why FINRA Is Doing This
FINRA has been reviewing whether the 2001‑era PDT regime still fits today’s market and technology. Last year, FINRA asked for public comment on the effectiveness and efficiency of its day‑trading requirements—covering account approvals, risk disclosures, and special margin rules—and received broad feedback from firms and investors. The Board’s action reflects that retrospective review.
Potential Impacts for Day Traders and Smaller Accounts (if the SEC approves)
Lower barrier to entry—but risk-based limits replace a hard floor
Access: Traders who don’t keep $25,000 in equity could, in principle, day trade more freely, subject to intraday risk limits set by maintenance‑margin rules. This could make smaller, disciplined accounts more viable for active strategies that were previously throttled by the PDT threshold.
- House controls still matter: As a reminder, firm rules can be stricter than regulatory minimums. That remains true under any new regime; firms may apply tighter limits based on risk.
More dynamic buying power during the day
Position‑driven leverage: Buying power would expand or contract as you add, close, or concentrate positions. Highly volatile names, option structures with gamma risk, or concentrated bets could consume margin quickly, reducing capacity for additional trades.
Intraday risk management moves to the forefront
Real‑time guardrails: Expect tighter real‑time checks for concentration, volatility spikes, and sudden P/L swings. That can reduce tail‑risk events but may also lead to intraday margin calls or automated reductions in exposure during stress.
Strategy mix and education
More flexibility for shorter‑hold equity trades and potentially for directional options—but with guardrails driven by the specific exposures you take. Education on maintenance margin mechanics becomes part of every active trader’s playbook.
What Day Traders Can Do Now
Keep Operating Under Today’s Rules
Continue to observe the current PDT requirements and the rule that day trading must be in a margin account. Violations can still trigger restrictions while the SEC review is pending.
Prepare Your Process For An Intraday‑Margin World
Know your exposures: Get used to tracking how volatility, concentration, and product type affect maintenance margin throughout the session.
Build hard stops and session limits: Pre‑define max loss and position caps that keep you inside maintenance‑margin thresholds if volatility jumps.
Optimize order workflow: Bracket and OCO orders can help contain risk when buying power is dynamic.
Follow The Regulatory Timeline
Watch for FINRA’s SEC filing and any effective date or implementation guidance. The proposal will be visible on FINRA’s Rule Filings page once submitted; until you see an SEC approval notice, treat this as upcoming—not active—policy.
Quick FAQ
Is the PDT designation going away?
FINRA’s Board approved amendments that would replace the day‑trading and pattern day trading rules with an intraday margin rule, eliminating the fixed $25,000 minimum in favor of risk‑based intraday maintenance‑margin controls—pending SEC approval.
When could this take effect?
There’s no effective date yet. FINRA must file the amendments with the SEC, and the SEC must approve them before they become operative.
Does this change day trading in cash accounts?
No, not today. Under current guidance, day trading in a cash account is not permitted; the action doesn’t alter that until and unless an approved rule says otherwise.
What about Cobra Trading’s account minimum?
Cobra Trading’s $30,000 account minimum remains unchanged as of today. This news does not alter Cobra’s current minimum; we’re sharing this update to keep traders informed.
Bottom Line
FINRA has taken a significant step toward modernizing day‑trading regulation by moving from a fixed $25,000 equity threshold to intraday, risk‑based maintenance‑margin oversight—but the change is not effective unless and until the SEC approves it. For traders, the potential result is more access paired with more dynamic risk controls. Until then, trade under the current PDT rules, keep your risk process tight, and watch for the SEC filing and approval notice.
