U.S. Proposes Removal of $25,000 Day‑Trading Equity Threshold

U.S. regulators are preparing to eliminate a long‑standing constraint on retail active traders: the $25,000 minimum equity requirement for frequent day trading. This week, the Financial Industry Regulatory Authority (FINRA) approved a rule amendment that would replace the current threshold with an intraday margin‑based framework, subject to final approval by the U.S. Securities and Exchange Commission (SEC).

Under the existing rule, introduced in 2001 amid concerns about retail exposure to highly volatile internet stocks, traders must hold at least $25,000 in a margin account to execute four or more day trades within any five‑business‑day period. The proposed approach replaces that fixed minimum with maintenance‑margin calculations applied to intraday position exposure, so intraday buying power would be determined by the margin requirements of positions held during the trading day rather than by a single account equity floor.

Regulators have framed the amendment as a response to substantial shifts in market access and trading technology since the rule’s inception. Market observers expect the change could support higher retail activity, including increased options trading, and may lift transaction volumes at discount brokers. Following the announcement, Robinhood’s shares moved from losses to gains during Wednesday’s session, climbing roughly 1% intraday.