Buying power after the PDT rule: FINRA's intraday margin standard

Start in plain English

Day trading buying power is the dollar amount your broker lets you buy, or sell short, right now in a margin account. It is not a fixed multiple you can look up in a rule. Your broker calculates it from your equity, the margin rules and its own house requirements, so two brokers can show different figures for the same deposit.

Until 2026, FINRA's margin rule defined a specific "day-trading buying power" for pattern day traders. Amendments approved by the SEC replaced that framework with an intraday margin standard, effective June 4, 2026. Firms that need more time may phase it in until October 20, 2027. Why FINRA changed the rule, and the full timeline, are covered in The $25,000 pattern day trader rule is gone. This lesson is about the arithmetic: how much you can trade at once, and what happens when a trade goes past the line.

The core idea: under the new standard, the limit is maintenance margin at every moment of the day, not a count of your day trades.

The old number and the new one

The old framework (FINRA Rule 4210(f)(8)(B), deleted effective June 4, 2026) applied to "pattern day traders", generally customers with four or more day trades within five business days. A pattern day trader needed $25,000 of equity. Their day-trading buying power was the previous day's closing equity minus the maintenance margin requirement, multiplied by four for equity securities. Exceeding it created a special maintenance margin call.

The new framework (Rule 4210(a)(17)–(19) and (d)(2)) removes the designation, the trade count, the $25,000 minimum and the defined day-trading buying power. Instead, the firm determines an intraday margin deficit for each margin account, other than good-faith and portfolio margin accounts, on any day with an IML-reducing transaction. Three terms carry the rule:

• Intraday margin level (IML): the cash you could withdraw at a given moment while still meeting maintenance margin. If you would need to deposit cash to meet maintenance, the IML is negative.
• IML-reducing transaction: any trade or withdrawal that lowers the IML, for example buying stock (other than to cover a short) or selling short.
• Intraday margin deficit: for that day, at least the absolute value of the largest negative IML right after any IML-reducing transaction.

Worked example: one morning, one deficit

Illustrative. A margin account holds $6,000 of equity and no positions. The broker has implemented the new standard and applies FINRA's 25% maintenance requirement to long stock. Prices do not move between the trades, and fees are ignored, so equity stays $6,000 all morning. The companies are fictional.

The 10:15 purchase pushed maintenance above equity. The IML right after it was −$1,000, the largest negative IML of the day, so the account has a $1,000 intraday margin deficit for that day.

She ended the morning flat. That does not erase the deficit. The rule looks at the account right after each IML-reducing transaction, not only at the close. The 11:30 sale does not satisfy it either: only net deposits or IML increases after the end of the deficit day count, so a $1,000 deposit the next day would. At a broker that blocks deficits in real time, the 10:15 order would probably have been rejected instead.

The same arithmetic gives her buying power. With prices unchanged and no other positions, the IML stays at zero or above while long market value ≤ equity ÷ maintenance rate: $6,000 ÷ 0.25 = $24,000. Her 09:52 purchase left $4,000 of room; the 10:15 order asked for $8,000.

What happens after a deficit

Per FINRA Regulatory Notice 26-10, an intraday margin deficit works like this:

• Satisfy it as promptly as possible. A deficit counts as satisfied when, between the end of that day and the end of a later day, net deposits or other increases in the IML add up to the deficit.
• It stays outstanding until satisfied or until immediately after the close of business on the 15th business day after the deficit date.
• Repeated failure has a cost. If a customer makes a practice of not satisfying deficits promptly, and a deficit is still unmet at the close of the fifth business day, the firm must prevent the customer from creating or increasing a short position or debit balance for 90 calendar days after that fifth business day, or until the deficit is satisfied. FINRA's investor page describes this as an account "restricted for up to 90 days".
• Small deficits are excluded from the "practice" test: those no larger than the lesser of 5% of account equity or $1,000, and those the firm reasonably determines arose from extraordinary circumstances.

Apply that to the worked example. Five percent of $6,000 is $300, which is less than $1,000, so the threshold is $300. Her $1,000 deficit is above it, so it counts if she leaves it unmet.

Real-time or end-of-day: how your broker runs it

The rule does not require one method. The SEC's approval order describes two:

• Real-time monitoring. The firm checks positions live and blocks orders that would create or increase a deficit. Customers of such firms see rejected orders rather than deficits.
• An end-of-day calculation. The firm computes the day's deficit once, after the close, from the day's transactions.

Firms can also apply stricter house rules. Ask your broker which method it uses, because it changes what you see: a rejected order at 10:15, or a deficit notice the next morning.

The phase-in: which framework applies to you today

Status as of 2026-10-06. The SEC approved the amendments on April 14, 2026 (Release 34-105226). FINRA announced them in Regulatory Notice 26-10 on April 20, 2026, effective June 4, 2026. Firms that need more time may phase in implementation over 18 months, until October 20, 2027. The SEC order notes that during this interim period firms may continue applying the old day trading margin requirements where appropriate, for example by account.

So before October 20, 2027, your broker may apply the old framework, the new one, or the old one to some accounts and the new one to others. Four questions settle it:

1. Is my account under the pattern day trader rules or the intraday margin standard, and from what date?
2. Do you block deficits in real time, or calculate them at the end of the day?
3. What house maintenance requirement applies to the stocks I trade, especially low-priced ones?
4. How do you define the "day" for extended-hours and overnight trades?

House requirements shrink buying power

FINRA's 25% maintenance requirement is a floor. Brokers often require more, and low-priced, volatile small caps are where house requirements tend to be highest. The rule measures the intraday margin level against the maintenance margin Rule 4210 requires, with 25% as the floor for long stock. A broker may measure it against its higher house rate instead, so ask yours which rate it uses.

With prices unchanged and no other positions, the long market value you can hold without a deficit is equity ÷ maintenance rate:

Two more limits sit on top:

• The $2,000 minimum. FINRA Rule 4210(b) still requires $2,000 of equity to trade on margin. Below that, you can keep a margin account but trade only with your own cash.
• Positions held overnight. Regulation T's initial margin, 50% of the purchase value for most margin stocks, still applies to positions you carry. That is one reason brokers often show a smaller buying power figure for overnight holds than for intraday trades.

Prices also move, and room shrinks faster than the price. Go back to the worked example (Illustrative). Suppose Harrow Pine falls 5% after the 09:52 purchase. The position is now worth $19,000, equity drops to $5,000, maintenance is $4,750 and the IML is +$250. Her room for new purchases fell from $4,000 to $1,000 ($5,000 ÷ 0.25 − $19,000) on a 5% move. A buying power figure from 09:55 can be stale by 10:00.

Cash accounts sit outside both frameworks

The pattern day trader rule never applied to cash accounts, and the intraday margin standard does not either. A cash account is limited by Regulation T's payment rule and settled cash, as covered in Cash vs. margin accounts.

Common mistakes

• Treating a platform's buying power figure as a rule. It is your broker's calculation under its house requirements, and it moves with prices.
• Assuming that being flat at the close means no deficit. The deficit is measured right after each IML-reducing transaction.
• Adding up the day's negative IMLs. The deficit is the largest negative IML, not the sum of them.
• Assuming your broker has switched. Until October 20, 2027, it may still run the old framework on your account.
• Using 4× as a target. Four times equity is only the ceiling under the 25% floor. At that size, a small adverse move creates a deficit.

Apply it in FennEdge

• FennEdge does not show your buying power, margin balance or deficits; your broker is the only source for those. Check its figures before you size a trade.
• The Trading Journal syncs real fills from supported brokers. After a day with a deficit notice, open the Journal and find the trade that pushed the account past the line: the time, the size and the price are on the synced fills.
• The Journal holds broker-synced trades only. It is a review tool, not a margin calculator.

What this lesson does not claim

• It does not describe any individual broker's implementation, house requirements or switch date.
• The table's house rates and the worked example are Illustrative. The equity ÷ rate shortcut assumes long stock only, unchanged prices and no other positions.
• The rule text includes details this lesson leaves out, such as sweep balances, "as of" adjustments and options. Read the Notice for those.
• Regulatory status is as of 2026-10-06. This is education, not legal advice.

Go deeper

• The rule change: The $25,000 pattern day trader rule is gone, for the timeline, what was removed and what stayed.
• Previous lesson: Cash vs. margin accounts, on settlement, violations and maintenance calls.
• Next lesson: Offshore brokers, including how these FINRA rules apply to firms outside the US.
• Sizing: Position sizing and Daily loss limit in the scalping course.

Exercises

Three exercises follow this lesson: a concept check on why a flat close does not erase a deficit, a calculation of one day's intraday margin deficit from a sequence of trades, and a scenario about a pattern day trader warning during the phase-in. Exercises, answers and progress are available after signing in.

Primary sources

• FINRA. Regulatory Notice 26-10 (April 20, 2026): effective date, phase-in, deficit handling.
• US Securities and Exchange Commission. Release No. 34-105226 (April 14, 2026): order approving SR-FINRA-2025-017.
• FINRA. Rule filing SR-FINRA-2025-017.
• FINRA. Rule 4210: Margin Requirements.
• FINRA. Understanding the New Intraday Margin Requirements.
• Federal Reserve Board. Regulation T, 12 CFR 220.12: Margin requirements.

Sources checked 2026-10-06. Harrow Pine Tech, Saltmarsh Foods and all balances, trades and house rates in this lesson are fictional and Illustrative. This lesson is education, not a recommendation to buy or sell any security.