Intraday Margin Requirements

Intraday margin requirements are the standards in paragraph (d)(2) of FINRA Rule 4210, headed "Intraday Margin," that require a brokerage firm to measure and collect margin against the market exposure a customer's margin account carries at points during the trading day, not only at the close. FINRA adopted them to replace the day trading margin requirements, and its own Regulatory Notice 26-10 states the scope of the replacement directly. FINRA "has adopted new intraday margin standards to replace in their entirety the outdated day trading margin requirements, including the day trade count requirements for designating a customer as a 'pattern day trader' and the $25,000 pattern day trader minimum equity requirement."

FINRA calls the new provisions the "intraday margin rule," and the Commission's approval order calls them "new intraday margin standards." Both names describe the same amendments. The older name a reader is likely to arrive with, the "pattern day trader rule," names what these requirements replaced rather than another name for them. This page covers the new standard; the activity of day trading, the four-trades-in-five-days test and the question of whether the $25,000 floor still reaches a particular account are covered on our page for day trading, and the demand a firm makes when an account falls short at the close is covered on our page for the margin call.

Note that the new rule supplements rather than displaces the ordinary maintenance margin requirement. FINRA states that the rule "does not change the regular maintenance margin requirements as they exist today, but rather supplements them."

The core measurement is a running number called the IML, and everything else in the rule hangs off it. Rule 4210(a)(17) defines the "intraday margin level," or IML, as either the amount of cash a customer could withdraw while still meeting the maintenance margin the rest of Rule 4210 requires, or, where the account is short of that requirement, the additional cash the customer would have to deposit, expressed as a negative number. So a positive IML is headroom and a negative IML is a shortfall. Rule 4210(a)(18) defines an "IML-reducing transaction" as any purchase or sale in the account that reduces the IML, including a position created by the exercise or assignment of an option, the expiration of a long option that reduces the IML, and any withdrawal of cash or securities. Rule 4210(a)(19) then defines the "intraday margin deficit" as, broadly, the largest negative IML the account reached after any IML-reducing transaction during the day.

The consequence is that a position opened and closed within the same session can leave a recorded deficit even though the account ends the day compliant. The old framework counted round trips and then imposed an equity floor on a category of customer. The new one measures exposure. FINRA states the design intent as ensuring that customers "maintain equity in their margin account commensurate with the amount of market exposure they have at any given point in time during the trading day," and the Commission's approval order records that this applies "irrespective of whether they engage in day trading." An investor who never makes a same-day round trip can still create intraday exposure, which is why calling this a relaxation of the day trading rules describes only half of it.

Who is outside the rule. Rule 4210(d)(2)(A) requires the determination for each customer margin account "other than a good faith account or portfolio margin account." A portfolio margin account is governed instead by paragraph (g), which the same amendments updated with its own intraday provisions, and a cash account is not a margin account at all.

Real-time monitoring is permitted and is not required, which is the point most likely to surprise someone expecting instant blocking. FINRA notes that the rule is designed so that members "may implement real-time monitoring of customer positions and blocking transactions that would otherwise create or increase intraday margin deficits," but that this is not a requirement: members are permitted to make a single calculation of an account's intraday margin deficit as they already do for maintenance margin at the close. The rule also gives members several latitudes in that calculation, including treating deposits at FDIC-insured banks under the firm's own sweep program as a credit balance in the account, using market values more recent than the execution price or the previous close, and treating all deposits and withdrawals during the day as occurring at the start of the day. Where a firm cannot show which of two activities came first, the rule requires it to assume the order that produces the highest deficit.

Satisfaction, expiry and the freeze are three separate clocks, and they are easy to run together. A deficit must be satisfied "as promptly as possible." It is satisfied when net deposits, or another increase in the account's IML, equal the deficit. It remains outstanding until satisfied or until immediately after the close of business on the fifteenth business day after the date it arose. Separately, the 90 day freeze has two conditions that must both be met: the customer must make a practice of failing to satisfy deficits as promptly as possible, and must also fail to satisfy one by the close of business on the fifth business day after it occurs. Only then must the member enforce written policies and procedures designed to prevent that customer from creating or increasing a short position or debit balance, other than by closing a short position, for 90 calendar days after that fifth business day, or until the deficit is satisfied. The freeze restricts new borrowing and new short exposure; it is not a bar on trading with settled funds.

The de minimis carve-out keeps small slips out of the "practice" test. A customer is not treated as making a practice of failing to satisfy deficits because of deficits that do not exceed the lesser of 5 percent of the equity in the margin account or $1,000, or that a member reasonably determines arose under extraordinary circumstances.

What the replaced regime was, in one paragraph, because a reader may still be living under it. The old requirements identified a "pattern day trader" by a trade-count test and required that customer to keep at least $25,000 in the account. The Commission's order approving the change records the outgoing test's proportion condition, which excused a customer whose day trades were 6 percent or less of total trades over a five business day period. Those provisions are already gone from the rule text: Rule 4210(f)(8)(B) and Rule 4210(g)(13) both read "Reserved." in the current rulebook. What survives is a transitional accommodation for firms, not rule text, and it is why a customer can still meet the $25,000 requirement at a firm that has not finished migrating. Our page on day trading sets out the outgoing test and its arithmetic.

The firm determines, for each customer margin account other than a good faith or portfolio margin account, whether any transaction during the day reduced the account's intraday margin level. If one did, it computes the largest shortfall that transaction produced, calls that the intraday margin deficit, and requires the customer to satisfy it as promptly as possible. The deficit stays outstanding until satisfied or until the fifteenth business day after it arose. Repeated failure, plus a specific miss by the fifth business day, triggers the 90 calendar day restriction.

A hypothetical illustration of how a deficit appears in an account that ends the day looking fine. Suppose Ilaria's margin account holds $30,000 of marginable stock against a $12,000 margin loan, so her equity is $18,000. Using FINRA's 25 percent maintenance floor for illustration, the requirement against that position is $7,500 (25% of $30,000), so her IML, the cash she could withdraw and still meet it, is $10,500 ($18,000 minus $7,500).

During the session she buys another $60,000 of stock on margin. The position is now $90,000 and the loan is $72,000, so her equity is unchanged at $18,000 while the requirement rises to $22,500 (25% of $90,000). The IML is now negative $4,500 ($18,000 minus $22,500), which means the account would need a $4,500 deposit at that moment. That is the intraday margin deficit for the day.

She sells the $60,000 position back before the close, so the account finishes the session exactly where it started and no maintenance call is generated. Under the outgoing framework the round trip would have been counted as a day trade. Under the new one the $4,500 deficit is recorded and must be satisfied as promptly as possible. It is not de minimis: 5 percent of her $18,000 equity is $900, and the carve-out is the lesser of that and $1,000, so the threshold is $900 and the deficit is five times it. All figures are illustrative, and the requirement your own firm applies may be higher than the regulatory floor used here.

Pros

• It removes an equity floor that barred customers with smaller accounts from a category of ordinary trading, which is the change most retail investors will notice.
• The measurement is tied to what the account was actually exposed to rather than to a trade count, so it does not capture someone by accident of bookkeeping.
• Small slips are carved out: a deficit no larger than the lesser of 5 percent of account equity or $1,000 does not count toward the practice test.
• The rule permits, rather than requires, real-time monitoring, so firms are not forced into blocking systems that would reject orders mid-session.

Cons

• It reaches customers who do not day trade at all, because intraday exposure can arise from any IML-reducing transaction, including a withdrawal.
• Closing a position before the bell no longer erases the exposure: a deficit can be recorded on a day the account ends fully compliant.
• "As promptly as possible" is not a stated number of days, so the operative deadline is the firm's own procedure rather than a figure in the rule.
• The 90 calendar day restriction runs from the fifth business day after the missed deficit, not from the day it is imposed, and it blocks new short positions and new debit balances rather than only the conduct that caused it.
• Until the phase-in closes on 20 October 2027, two frameworks are live across the industry, so the requirements on an account depend on the firm's own implementation timetable.
• The regulatory figures are floors. A firm may apply higher house requirements and may change them, which our page on the margin call sets out.