Oct 6, 2025
The Financial Industry Regulatory Authority has approved a proposal that would remove a big roadblock for active retail traders: the $25,000 minimum equity rule. (1)
If the U.S. Securities and Exchange Commission signs off, removing this long-standing threshold could kick off a massive shift in how small accounts participate in day trading.
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But before you move to supercharge your trading app, there are some important things to consider.
Introducing the intraday margin rule
According to CNBC, The Financial Industry Regulatory Authority (FINRA) has approved a change that would replace the $25,000 minimum equity rule with a new “intraday margin rule.”
“One’s intraday buying power will be based on the margin requirements for the positions they take on during the day, not a fixed equity minimum,” according to CNBC’s Yun Li.
This means a day trader’s buying power would depend on their actual margin exposure, and not just their account balance. As of now, a day trader needs $25,000 just to start trading, and they must maintain that minimum balance in a margin account in order to make trades.
This rule was put in place in 2001 during the dot-com boom, when regulators became worried that small traders were taking massive risks with the volatility of internet stocks.
With the intraday margin rule, a day trader could use more of their money actively instead of stashing a large chunk in their margin account just to meet the minimum requirement. This could make it easier to make quick moves in the market, like buying a dip or selling a spike, even with a smaller account.
It could also give day traders more flexibility. Instead of worrying about meeting a minimum balance, their trading capacity would be based on their actual margin exposure throughout the day. This makes it easier to manage risk and respond to fast-moving market signals.
For beginners, the lower financial commitment could make testing short-term strategies feel less intimidating.
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What new and veteran day traders need to consider
While the intraday margin rule could be good news for beginners, those who are interested in day trading should proceed with caution.
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Day trading is still one of the riskiest ways to invest, and making it easier to enter the market could tempt some new investors into overtrading. FINRA warns that day trading isn’t meant for people who have limited investment experience or limited financial resources.
The thrill of a few quick wins can quickly turn into a cycle of making decisions based on emotions, especially when losses pile up and traders feel the urge to “get it back” in their next move. After all, a sudden market swing could still wipe out gains, or even entire accounts, in minutes.
If you’re interested in day trading, here are a few strategies that can help you build sustainable wealth:
- Buy and hold: A solid passive strategy is to buy equities, bonds and diversified ETFs and hold onto them, letting compound interest and time work in your favor
- Dollar cost averaging: If you don’t have the means to invest a large sum of money, try investing smaller amounts more frequently
- Stay diversified: Avoid putting too much money in one investment or sector. Instead, aim for a diversified investment portfolio that boasts a healthy mix of assets including equities, bonds and commodities
As for veteran day traders, the intraday margin rule could increase their exposure to market volatility, which is a significant drawback.
"The combination of leverage and large position control with small capital investment creates dangerous scenarios, as small price movements can generate significant financial wins or losses," states Kyle Maring in an article for Highstrike. (2)
"Profitable trades can quickly turn into losses during sudden market movements, such as those triggered by unexpected news releases, like Alphabet’s disappointing earnings report, economic data, or geopolitical events, requiring traders to implement robust risk management strategies."
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Jessica is a freelance writer with a professional background in economic development and small business consulting. She has a Bachelor of Arts in Communications and Sociology and is completing her Publishing Certificate.
