The $25,000 floor that has defined day trading for a generation fell yesterday. FINRA effectively killed its pattern day trader rule on June 4, 2026, scrapping the minimum equity requirement that forced active traders to keep at least that much in margin accounts. Under the amended Rule 4210, brokers no longer label customers as pattern day traders. Instead, they're expected to monitor margin risk intraday — a shift from the old compliance checkbox to something far more dynamic.
What the old rule did — and why it ended
The pattern day trader rule was born in 2001, right after the dot-com bust. Regulators wanted to pump the brakes on speculative short-term trading by requiring anybody making four or more day trades in five business days to keep at least $25,000 in a margin account. It worked as a blunt gatekeeper. But the market has changed, and FINRA decided the rule was doing more harm than good for retail traders who didn't have that kind of cash sitting around. The new approach: let brokers police risk in real time rather than tag accounts with a binary label.
Which brokers flipped the switch
Four firms turned off the PDT flag on the same day the rule took effect: Robinhood, Webull, tastytrade, and TradeZero. Schwab's thinkorswim platform will follow on June 8. E*TRADE, Fidelity, and Interactive Brokers are also expected to support the change, though they haven't announced exact dates. The rollout isn't uniform — some brokers have been waiting for the June 4 hard deadline, others needed extra time to retool their risk monitors.
You still can't trade with pocket change
The end of PDT doesn't mean anyone with a phone can start day trading on zero. Federal Reserve Regulation T still requires at least $2,000 to open a margin account. Accounts that drop below that have to operate under cash-account rules, which means traders need settled cash before they buy. So there's a new floor, just a much lower one.
Why crypto folks can sit this one out
None of this touches spot crypto. The old PDT rule only applied to margin accounts at brokerages that handle stocks covered by FINRA's rules. Spot crypto exchanges never had to enforce a $25,000 floor, and the rule change doesn't affect them either. For crypto traders who also trade equities, the change matters — but pure crypto retail won't feel a thing.
The next concrete move comes Monday, when thinkorswim users get the update. The rest of the big brokers are expected to follow by the end of the second quarter, but as of this writing, only the first four have publicly confirmed live dates.
