Glossary
Pattern day trader
The FINRA label for a margin customer making 4+ day trades in 5 business days, with a $25,000 minimum; replaced in 2026 with a phase-in to 2027.
"Pattern day trader" (PDT) is a designation from FINRA Rule 4210 for US margin customers who day trade frequently. Under the long-standing rule, a customer who made four or more day trades within five business days in a margin account was flagged as a PDT and had to keep at least $25,000 of equity in the account. In 2026 FINRA replaced that framework, but firms may keep the old treatment during a phase-in, so the label still shows up at many brokers.
How the old rule worked
A day trade is buying and selling (or shorting and covering) the same security on the same day in a margin account. The legacy test counted them:
- Trigger. Four or more day trades in five business days, unless they were 6% or less of all trades in that window.
- Minimum. $25,000 of equity before day trading could continue, maintained at all times.
- Buying power. Up to four times excess maintenance margin for equities.
- Penalty. An unmet day-trading call meant 90 days of cash-only trading.
What changed in 2026
The SEC approved FINRA's amendment on April 14, 2026, and Regulatory Notice 26-10 made it effective June 4, 2026. It eliminated the PDT designation, the $25,000 minimum and day-trading buying power, and replaced them with an "intraday margin deficit" standard: a firm measures whether intraday trading pushed an account below its margin requirements and requires prompt payment of any deficit. The $2,000 minimum equity for margin trading and the 25% maintenance requirement remain.
Firms may phase the change in until October 20, 2027, so whether your broker still applies the four-trade count depends on the firm. Cash accounts were never subject to PDT, but they have their own settlement rules.