U.S. stock trading regulations loosened! The $25,000 intraday trading threshold may be lifted

Wallstreetcn
2025.09.24 21:55
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The Financial Industry Regulatory Authority (FINRA) plans to lift the $25,000 minimum account equity rule for retail day trading, aiming to lower the barrier for small accounts to participate in active trading. The new rule will be based on the margin requirements of positions held on the day, rather than a fixed account balance. This reform could increase options trading and enhance trading activity at brokerages like Robinhood. The change is still pending approval from the Securities and Exchange Commission (SEC)

U.S. regulators are moving to eliminate one of the most controversial thresholds faced by active retail traders—the $25,000 minimum account equity rule required for frequent day trading.

The Financial Industry Regulatory Authority (FINRA) approved a revised proposal this week that will replace this long-standing threshold, making it easier for small accounts to participate in active day trading. The change is still subject to approval by the U.S. Securities and Exchange Commission (SEC).

The current $25,000 minimum equity rule requires traders to maintain a balance of at least $25,000 in a margin account to execute four or more day trades within five trading days. This regulation was introduced in 2001 during the burst of the dot-com bubble, when regulators were concerned that small-scale traders were taking on excessive risks in highly volatile internet stocks.

FINRA will replace it with new day trading margin rules, applying existing maintenance margin rules to day trading positions. In other words, investors' day trading buying power will be based on the margin requirements of their positions held on that day, rather than relying on a fixed minimum account equity amount.

Regulators stated that this reform reflects the profound changes in technology and market access for retail trading since the rule was implemented.

This rule adjustment could drive more options trading and enhance trading activity at brokerages like Robinhood. Following this news, Robinhood's stock price turned from a decline to an increase during Wednesday's U.S. trading session, rising by about 1% at one point.

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