The $25,000 Day-Trading Floor Is Gone. Twenty-Five Percent Measured Intraday Replaced It.

For twenty-five years the number that governed a small United States equity account was $25,000. Four or more day trades in five business days, above 6 percent of total trades, and the account had to carry that balance or stop trading. As of June 4, 2026 that number is out of the rulebook, and the number that replaced it is also built out of 25 — but it is 25 percent, and a percentage of what, measured when, is the whole question.

Two readers can look at the same flat account on the same evening and disagree by $5,000. The first opens the position screen after the close, sees no shares, $10,000 of cash and a maintenance requirement of $0, and calls the day clean. The second runs that day through the definition the amended rule actually uses, finds an intraday margin deficit of $5,000, and starts a clock that can restrict the account for 90 calendar days. Both are reading 25 percent. One reads it at 4:00 p.m.; the rule reads it at the worst moment of the session. What follows traces that figure from the paragraph that deleted $25,000 to the amount a broker books against an account that closed flat.

One Number Left, and It Is a Percentage

The change arrived through SR-FINRA-2025-017. SEC Release No. 34-105226, Order Approving SR-FINRA-2025-017 states the effect plainly: the proposed rule change would, “among other things, eliminate provisions relating to 'pattern day traders,' the computation and use of 'day-trading buying power,' and the minimum equity requirement of $25,000 for pattern day traders.” Those three are named, among others, and the third is the one retail screens still quote. FINRA Regulatory Notice 26-10 sets the effective date at June 4, 2026 and runs the phase-in to October 20, 2027.

FINRA, Understanding the New Intraday Margin Requirements puts it in the second person. “FINRA is replacing current day trading margin provisions, including the requirements for 'pattern day traders' (the PDT rules), with new intraday margin requirements.” Then, flatly: “There’s no $25,000 minimum equity requirement for day trading”. And: “There’s no 'pattern day trader' designation based on counting trades.” The trade counter is retired. Nothing in the account is measured in units of four any more.

What remains is a maintenance level, and the page fixes when it must hold: “Under the new requirements, you must hold adequate maintenance margin—a minimum equity level of 25 percent of the current market value of the long margin-eligible equity securities in your margin account—throughout the entire trading day, not just at end of the day.” That points back into the rulebook. FINRA Rule 4210, Margin Requirements opens paragraph (c) with a carve-out before it gives any figure: “The margin which must be maintained in all accounts of customers, except as set forth in paragraph (e), (f) or (g) and for cash accounts subject to other provisions of this Rule, shall be as follows”. Then (c)(1) supplies the 25 percent, applied to the current market value of margin securities long in the account.

So the arithmetic changed shape. $25,000 was a floor under the account. 25 percent is a fraction of a position. The two coincide at exactly one place: 0.25 times $100,000 of long market value equals $25,000. Below that market value the new requirement is smaller than the retired floor, above it larger. An account holding $60,000 of stock owes 0.25 times 60,000, or $15,000. An account running $200,000 of long market value owes $50,000, double the old floor. Reporting the change as “the $25,000 rule is now 25 percent” loses that entirely, in the same way a share count and a percentage cap diverge in Rule 144 Volume Caps: One Percent of Shares or the Four-Week Average.

The Federal Reserve's number is a different percentage and belongs in a different column. Federal Reserve Board, Regulation T Supplement, 12 CFR 220.12 requires, for a margin equity security, “50 percent of the current market value of the security or the percentage set by the regulatory authority where the trade occurs, whichever is greater.” On $60,000 that is $30,000, against $15,000 of FINRA maintenance on the same position. Which figure the new intraday test uses is settled by definition rather than by preference, and the initial-versus-maintenance split is worked through separately in Reg T Sets 50 Percent, the Maintenance Call Sets Something Else.

Where the Twenty-Five Percent Gets Measured

The amended rule introduces a defined term that does the work. Rule 4210(a)(17) defines an account's intraday margin level, abbreviated IML, as either “the amount of cash that the customer could withdraw while still having the maintenance margin required by provisions of Rule 4210 other than Rule 4210(d)(2); or ... the amount of additional cash (expressed as a negative number) that the customer would need to deposit into such margin account for it to have the maintenance margin required by provisions of Rule 4210 other than Rule 4210(d)(2)”. Two readings of one quantity, positive and negative, both anchored to maintenance margin. That phrase, other than Rule 4210(d)(2), is what routes the calculation to (c)(1) and its 25 percent instead of to Regulation T.

IML is not computed once a day. It is computed at every event the rule calls an IML-reducing transaction, defined in (a)(18) as “any purchase or sale effected in such account (including as the result of the exercise or assignment of an option) that has the effect of reducing the account's IML, the expiration of any option long in the account that has the effect of reducing the account's IML, and any withdrawal of cash or securities from such account.” Purchases, sales, option expirations and cash withdrawals all qualify. The scope of the duty is set in (d)(2)(A): “Each member shall determine the intraday margin deficit, if any, for each margin account of a customer that it maintains (other than a good faith account or portfolio margin account) and for each day in which there is any IML-reducing transaction in such account.” Then (a)(19) picks the extreme: an intraday margin deficit is “an amount determined in accordance with Rule 4210(d)(2)(B) by the member maintaining such account that is not less than the absolute value of the largest negative IML (if any) with respect to any IML-reducing transaction in such margin account during such day.”

Largest negative, absolute value, during such day — not the close.

Run it. Start with $10,000 of cash, no positions, a margin-eligible stock at $100.00 a share. Buy 200 shares: market value $20,000, maintenance 0.25 times 20,000 equals $5,000, equity $10,000, so IML equals 10,000 minus 5,000, positive $5,000. Sell, then buy 400 shares: market value $40,000, maintenance $10,000, IML exactly $0. Sell, then buy 600 shares: market value $60,000, maintenance $15,000, IML equals 10,000 minus 15,000, negative $5,000. Sell before the bell. At 4:00 p.m. the account is flat: long market value $0, maintenance requirement $0, equity $10,000, end-of-day call $0.

The day's intraday margin deficit is at least $5,000. The end-of-day statement shows nothing at all.

A withdrawal produces the same result without any trading. Hold the 400 shares, $40,000 of market value, $10,000 of equity, IML $0, and take out $2,000. Equity falls to $8,000, maintenance stays at $10,000, IML becomes negative $2,000. The day now carries a $2,000 intraday margin deficit created by a cash transfer. The (D) carve-out reaches only the practice finding, and the rule does not say when equity is read: on the $8,000 left, 5 percent is $400, the lesser of $400 and $1,000, so a $2,000 deficit sits outside it. Fixed reference points do this in every rulebook, as in Level 2 Sits 6.45 Percent Under Level 1, Not Another Seven Percent.

The Ordering Rule and the Permission That Undoes It

Here the two readings stop being a reader's error and become a firm's choice. Rule 4210(d)(2)(B)(vi) sets the default when a day's sequence cannot be established: “except as provided above, if two or more activities in a margin account occurred during a day and the member cannot demonstrate that one activity occurred before another activity, then the IML with respect to such activities shall be computed on the assumption that the activities occurred in an order that results in the highest intraday margin deficit for such day.” Ties go to the worst case, deliberately.

Read the four words that open that clause. Except as provided above points back over (B)(i) to (v), and (B)(iv) grants a permission rather than imposing a rule: a member may treat certain items “as occurring simultaneously and immediately after the beginning of the day, notwithstanding the actual time of their occurrence”, and the first item listed is all deposits and withdrawals of cash or securities into or from the account during that day.

Now take one account and one tape. A customer buys 600 shares, $60,000 of market value, against $10,000 of equity, and wires in $6,000 that afternoon. At a firm that adopted the (B)(iv) policy, the deposit is treated as having landed at the start of the day: equity $16,000, maintenance $15,000, IML positive $1,000, no negative IML anywhere, deficit $0. At a firm without that written policy, the purchase is measured on its own: equity $10,000, maintenance $15,000, IML negative $5,000, deficit $5,000.

Same 25 percent, same $60,000, same $6,000 deposit. One permissive word moves the answer by $5,000. The trap is treating a broker's figure as arithmetic when it is arithmetic plus a written policy. The same section grants two further permissions in the same register: (B)(ii) lets a member use market values more recent than the execution price or the prior close, “provided that such procedure is reasonably designed for the purpose of making computations using more current market values rather than reducing intraday margin requirements”, and (B)(i) lets a member count a customer's swept bank deposits as a credit balance. Each changes the inputs to the same 25 percent.

Concrete Framework

The retired test ran off a blotter: count round trips, compare with four, compare the count with total trades. The new test cannot, because it needs a running balance rather than a count. A workable reconstruction has five steps.

First, list every IML-reducing transaction for the day in time order, including cash and security withdrawals, not only buys and sells. Second, at each of those events compute equity minus 25 percent of long market value, using the market value the broker would have used at that instant. Third, take the most negative result; (a)(19) makes its absolute value the floor under the member's figure, not the figure itself. Fourth, compare that figure with the de minimis line, the lesser of 5 percent of the equity in the margin account or $1,000 — on $8,000 of equity that line is $400, and it shrinks as equity shrinks. Fifth, and this step gets skipped: ask the broker in writing whether it has adopted the (B)(iv) deposit-timing policy, the (B)(ii) more-recent-values policy and the (B)(i) sweep policy, because those three answers can move step three by thousands of dollars on the same tape.

Then the clock. Rule 4210(d)(2)(C)(i) requires the member to have the deficit “satisfied as promptly as possible” once it exists, and (C)(ii) treats it as satisfied when, from the end of that day to the end of a later day, the customer has made net deposits or otherwise raised the account's IML by an amount equal to the deficit. The deficit itself expires on a calendar: “An intraday margin deficit shall remain outstanding until satisfied or until immediately after the close of business on the fifteenth business day after the date of the intraday margin deficit.” Fifteen business days, not fifteen calendar days.

Expiry is not absolution, and the rule closes that gap in the same breath. Under (D), “If a customer makes a practice of failing to satisfy intraday margin deficits as promptly as possible and fails to satisfy an intraday margin deficit by the close of business on the fifth business day after it occurs, the member shall enforce written policies and procedures reasonably designed to prevent the customer from creating or increasing a short position or debit balance (other than by closing a short position) for 90 calendar days after such fifth business day or until the intraday margin deficit has been satisfied (without regard to its expiration pursuant to Rule 4210(d)(2)(C)(iii)).” The closing parenthetical is load-bearing: letting the deficit age out past the fifteenth business day leaves the 90 calendar days running. Two clocks, and only one of them ends the problem.

The practice test has its own carve-out, in two branches: a customer is not treated as making a practice of failing where the deficits “do not exceed the lesser of 5% of the equity in the margin account or $1,000; or ... are reasonably determined by the member to have occurred under extraordinary circumstances such that failures to satisfy such intraday margin deficits do not reflect a practice of failing to satisfy intraday margin deficits as promptly as possible.” A single $2,000 deficit falls outside the first branch at $8,000 of equity; whether it lands inside the second is the member's reasonable determination rather than a computation.

What Would Invalidate This

The largest hole is the transition. The investor page frames the window as the rulebook does: the changes “will become effective June 4, 2026 (with a permitted transition period through October 20, 2027, for brokerage firms that need more time)”. Inside that window a given broker may still be running the retired day trading provisions, $25,000 floor and trade count included. Which brokers sit on which regime on a given date was not verified here, and the rule text is not where that answer lives; a firm's margin disclosure is.

Three further limits sit on the face of the text. The determination under (d)(2)(A) reaches each margin account other than a good faith account or a portfolio margin account, so portfolio margin runs on different machinery and the worked figures above do not carry over to it. Paragraph (d)(1) leaves members free to formulate their own margin requirements and to institute higher ones, so a house requirement above 25 percent makes every IML figure here a floor rather than an estimate. And the $2,000 and $5,000 deficits above assume a $100.00 share price held flat through the session; a price that moves changes current market value, and therefore maintenance, at every step.

Two documents were left unopened inside this piece's budget of five primary sources. Amendment No. 1 to SR-FINRA-2025-017, filed in April 2026 and approved with the order, was not read, so any wording it changed against the December 2025 filing is unverified here. Nor was the Regulation T provision on same-day substitution inside a margin account; this piece therefore makes no claim about how Regulation T treats a position opened and closed within one session, only that Rule 4210(a)(17) keys the IML to maintenance margin under Rule 4210 rather than to the 50 percent figure in the Regulation T supplement.

The claim that survives is narrow and checkable. The figure that governed a small account was $25,000 and it was a level. The figure that governs it now is 25 percent and it is a fraction, applied at the most adverse IML-reducing transaction of the day rather than at the close, with that day's sequence resolved against the customer unless the member has written a policy resolving it otherwise. An account can finish flat, show a $0 maintenance call, and still owe $5,000.