What was the Pattern Day Trader (PDT) rule?

Under the former FINRA day-trading margin requirements, a pattern day trader was generally any margin customer who executed four or more day trades within five business days, provided those day trades were more than six percent of the customer’s total trades in that same window. Some firms used a broader house definition. Designated PDTs had to maintain at least $25,000 in account equity and could day-trade only in a margin account.

What counts as a day trade?

In plain terms, buying and selling (or selling short and buying to cover) the same security in the same day in a margin account. Exact counting can depend on firm systems. This guide does not give trade instructions.

Did the $25,000 threshold apply to cash accounts?

The classic PDT minimum equity applied to customers designated as pattern day traders in margin accounts. Cash accounts have different settlement and free-riding rules (Regulation T). FINRA’s investor page on frequent intraday trading stresses settled funds and T+1 settlement for cash-account activity.

What replaced the PDT rule in 2026?

FINRA Regulatory Notice 26-10 (published 2026-04-20) states that new intraday margin standards replace the day-trading margin requirements in their entirety, including the day-trade count designation and the $25,000 PDT minimum equity. Effective date 2026-06-04, with a member phase-in period ending 2027-10-20. There is no PDT designation based on counting trades under the new standards; firms monitor equity versus intraday exposure instead.

My broker still mentions PDT — why?

During the phase-in, a firm may still operate under the old day-trading margin requirements until it migrates. Investor.gov’s glossary and FINRA’s investor insight both tell customers to contact their brokerage firm to learn which regime applies. This site cannot see your firm’s implementation date.

Is this investment or trading advice?

No. This article explains regulatory education materials from FINRA and Investor.gov. It is not advice to trade, use margin, open or close an account, or buy or sell any security. No tickers are recommended.

Guide

Pattern Day Trader (PDT) rule explained — and what replaced it in 2026

Last updated 3 November 2026By the calcisland editorial team

Small US brokerage accounts often hit a wall labelled Pattern Day Trader — or, after mid-2026, a different wall labelled intraday margin. This guide separates the classic PDT framework (the $25,000 equity threshold and the four-trades-in-five-business-days count) from the Rule 4210 intraday margin standards that replaced it, using FINRA and Investor.gov primary pages checked on 2026-10-30. It is education, not advice. There are no trade calls, no broker picks, and no tickers as recommendations.

If you only need a sense of paycheck size versus living costs, the soft cross-link is the educational US take-home pay calculator — account funding is not the same as take-home maths, and that tool does not model trading rules.

Classic PDT in one table (former day-trading margin requirements)

Investor.gov’s glossary (still defining the historic designation while pointing to the 2026 replacement) and FINRA’s Regulatory Notice 26-10 summarise the former framework as follows:

Idea	Former rule (pre-replacement)
Pattern day trader	Margin customer who executes four or more day trades within five business days, when those day trades are more than 6% of total trades in that window (minimum; firms may define more broadly)
Minimum equity	Designated PDTs generally had to maintain at least $25,000 in the account
Account type	Day trading under that designation was a margin-account framework
Firm discretion	A firm could also designate a customer if it knew or had a reasonable basis to believe the customer would engage in pattern day trading

Those points are historical context for anyone who still sees PDT language on a statement during the industry phase-in. They are not a permission slip to trade.

What changed in 2026

FINRA Regulatory Notice 26-10 (published 2026-04-20):

Adopts new intraday margin standards amending Rule 4210.
Replaces in their entirety the day-trading margin requirements, including the day-trade count designation of a “pattern day trader” and the $25,000 PDT minimum equity requirement.
Effective date: 2026-06-04.
Phase-in: members that need more time may implement through 2027-10-20.

FINRA’s investor insight Understanding the New Intraday Margin Requirements states, in plain language:

No $25,000 minimum equity requirement for day trading under the new standards.
No “pattern day trader” designation based on counting trades.
Firms monitor whether equity covers open exposure during the day; a shortfall is an intraday margin deficit to be satisfied promptly.
Repeated failure to satisfy deficits promptly may lead to a restriction of up to 90 days.
Your firm may still run the old day-trading margin requirements during the transition — ask the firm.

FINRA’s updated investor page Frequent Intraday Trading: Understanding the Basics (dated 2026-06-04) likewise frames frequent trading through cash-account settlement risks and margin intraday monitoring, not through a four-trade counter.

Cash account vs margin account (education only)

Account	What the FINRA investor pages emphasise
Cash	Pay in full with settled funds; free-riding and good-faith violations are Regulation T / settlement issues. Most equities settle T+1.
Margin	Minimum equity to use leverage is generally $2,000 under Rule 4210 (firms may set higher house requirements). Intraday margin applies to daytime exposure under the new standards.

Neither column is a recommendation to open either account type.

What this page deliberately does not do

No trade ideas, options strategies, or ticker picks.
No broker or app recommendations (including no Futu or other named platforms as picks).
No claim that your firm has already finished its phase-in.
No substitute for your firm’s margin agreement or FINRA rule text.

Soft next step

For a separate educational view of US paycheck withholding (not trading capacity), try the US take-home pay calculator. For the live rule text and investor explainers, use the FINRA links in Sources — and ask your brokerage which regime it applies today.

Sources (primary)

FINRA, Regulatory Notice 26-10 — new intraday margin standards (checked 2026-10-30)
FINRA, Understanding the New Intraday Margin Requirements (checked 2026-10-30)
FINRA, Frequent Intraday Trading: Understanding the Basics (checked 2026-10-30)
Investor.gov, Pattern Day Trader glossary (classic definition + pointer to 2026 replacement; content verified 2026-10-30 via fetch)

Checked: 2026-10-30. Educational only — not investment, trading, or tax advice. See our disclaimer.

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