SEC removes $25,000 minimum balance requirement for day traders

Smaller investors can now place unlimited day trades without maintaining a $25,000 minimum balance. This change follows the SEC's approval of a proposal by FINRA to remove restrictions that previously limited accounts under $25,000 to three trades within five business days. The new framework replaces existing day-trading margin provisions with new intraday margin requirements. Customers must now have enough equity in their margin account to cover their current market exposure. Analyst Mike Grondahl of Northland says more day trading equates to more orders per user per day, which is a direct benefit to revenue generation for retail brokerages. This ruling is expected to boost engagement and retention as day traders typically log in more and trade more frequently than standard users. Retail brokerages will see an increase in revenue generation.