FINRA Regulatory Notice 26-10,
which becomes effective on June 4, 2026, will change how intraday margin is calculated
for active traders of both stocks and options.
Starting June 4, 2026, traders will see a major shift in how day trading works.
Since the Pattern Day Trader (PDT) rule went into effect in September 2001, traders have
been required to maintain at least $25,000 in their account to actively day trade stocks
and options. Additionally, four or more day trades within five business days in an account
below that equity threshold would trigger trading restrictions on the account.
Under the new framework, the trade-count limit and $25,000 minimum balance requirement have
been rescinded. As long as your account can support what you're trading and you're able to
settle all transactions by the end of the day, there's no cap on the number of day trades
you can make.
When trading stocks using a Reg T margin account, you still need to be cognizant of intraday
margin requirements, though. You must maintain sufficient buying power throughout the session
and cannot carry excess intraday margin overnight, as day-trading margin requirements will now
be aligned with overnight margin requirements. This means day-trading requirements will no
longer default to the minimum requirement floor; instead, they will follow the generally
higher overnight requirement.
The following scenarios will see a material change in margin treatment:
Stock Day Trades
If you trade stocks where overnight requirements are higher than the standard overnight
minimums, you will see higher intraday margin requirements. Currently, all day trades are
calculated using the standard regulatory 25% (4:1) maintenance requirement.
Going forward, stocks listed by clearing as having higher overnight requirements will now have
these higher requirements applied to day trading as well. This applies to both long and short
stock positions.
The chart below summarizes the reduction in leverage for a hypothetical $100,000 account:
| Maintenance Requirement |
25% (Standard) |
35% |
50% |
75% |
100% |
| Account Equity |
$100,000 |
$100,000 |
$100,000 |
$100,000 |
$100,000 |
| Leverage Ratio |
4-to-1 |
~2.86-to-1 |
2-to-1 |
~1.33-to-1 |
1-to-1 |
| Day Trade Buying Power |
$400,000 |
$285,714 |
$200,000 |
$133,333 |
$100,000 |
Naked (Short) Options Trades
(i.e., selling an option without owning the underlying stock or an offsetting qualified hedge)
Naked short options will see some of the most meaningful changes. Day-trade and overnight
requirements will now be identical, likely increasing the capital needed for intraday
positions. Historically, naked option day trading was charged the standard regulatory minimums
of 20% and 10%. Under the new rules, the intraday requirement will match the higher maintenance
requirement.
Below are hypothetical examples of how these requirements will change, assuming an underlying
stock price of $100, a short $110 Call ($10 OTM), and a short $90 Put ($10 OTM):
| Scenario (Test 1% / Test 2%) |
Short Call ($110) Calculation |
Final Call DT Req. |
Short Put ($90) Calculation |
Final Put DT Req. |
| Standard (20% / 10%) |
Test 1: $1,000
Test 2: $1,000 |
$1,000 |
Test 1: $1,000
Test 2: $1,000 |
$1,000 |
| Elevated (50% / 30%) |
Test 1: $4,000
Test 2: $3,200 |
$4,000 |
Test 1: $4,000
Test 2: $2,900 |
$4,000 |
| Elevated (75% / 35%) |
Test 1: $6,500
Test 2: $3,700 |
$6,500 |
Test 1: $6,500
Test 2: $3,350 |
$6,500 |
| Elevated (100% / 40%) |
Test 1: $9,000
Test 2: $4,200 |
$9,000 |
Test 1: $9,000
Test 2: $3,800 |
$9,000 |
0DTE Trades
Historically, 0DTE (zero days to expiration) option positions held through expiration did not
incur a day-trading requirement. In the new framework, expiration is now considered a day
trade. You can no longer "expire out" of a position to avoid a day-trade requirement. A margin
requirement will now be applied and charged for these expired positions.
Day-Trade Calls: Strict Restriction
If your account receives a day-trade call, the new regulatory framework requires brokers to
restrict the account to closing-only (liquidating) status for 90 days if the call is not met
within 5 days. There are no exceptions to this restriction, and there is no one-time
forgiveness or waiver.
Plan to meet margin requirements in full and on time; do not assume you will receive a second
chance if a call is issued.
If you have any questions regarding this matter, please contact TradingBlock Customer Support
at support@tradingblock.com or 1-800-494-0451.
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