Particle.news

SEC Ends Pattern Day Trader Rule, Removing $25,000 Barrier

Broker-dealers must now run real-time intraday margin controls which could broaden frequent day trading by smaller accounts.

Overview

  • The SEC approved amendments to FINRA Rule 4210 on April 14 and the new intraday risk-based margin framework took effect on Thursday, June 4, 2026.
  • The technical change replaces the old PDT trade-counting system with real-time risk assessments so brokers no longer have to flag accounts for making a set number of day trades.
  • Robinhood announced it lifted PDT restrictions and wiped past PDT flags clean, and retail-focused platforms saw near-term share-price gains as traders and firms reacted to the rule change.
  • Broker-dealers now carry the burden of building and operating continuous risk-monitoring and margin systems and may choose to enforce internal limits that resemble the old $25,000 rule.
  • Smaller margin accounts can potentially make frequent intraday trades if a broker’s risk system permits, a shift that could raise transaction volumes and revenue from margin lending, order flow payments, and subscriptions while raising new consumer-protection questions.