Account Minimums and Maintenance Margin

Key Takeaways

Two entirely different equity thresholds get lumped together as "margin requirements" and cause real confusion. One, the $25,000 minimum long associated with the pattern day trader (PDT) designation, is about eligibility to place further day trades and has just been replaced by a more granular, exposure-based standard. The other, FINRA's 25% maintenance margin, is about whether an account's equity has fallen too far relative to the value of positions bought on credit, and it applies to every margin account, whether or not it ever day trades. Confusing the two — or assuming meeting one protects against the other — is how accounts end up liquidated by surprise.

Direct answer: A margin account can be forced to sell positions or restricted from further trading in two distinct ways: falling below FINRA's 25% maintenance margin requirement (or a broker's higher house requirement) after a decline in position value, which can trigger a maintenance call and discretionary liquidation without notice; or, historically, falling below the $25,000 equity floor tied to the pattern day trader designation, which restricted day-trading buying power rather than triggering a forced sale. FINRA replaced the flat $25,000 PDT threshold with an intraday, exposure-based margin standard effective June 4, 2026, so the 25% maintenance margin rule is now the more consistently applicable number to know.

• FINRA Rule 4210 requires at least 25% equity in a margin account relative to the current market value of long positions — a regulatory floor, not a target.
• Broker "house" maintenance requirements are commonly 30%–40%, and can run far higher on volatile, low-priced, thinly traded, or concentrated positions.
• The $25,000 PDT minimum applied only to margin accounts flagged for frequent day trading; FINRA replaced it with exposure-based intraday margin monitoring effective June 4, 2026, phasing in through October 20, 2027.
• A maintenance call and a PDT-related restriction are triggered by different things and can happen independently of each other.
• Brokers can liquidate positions to satisfy a Reg T call or a maintenance call without prior notice, per the margin agreement signed at account opening.
• None of this is personalized advice; margin rules and house requirements vary by broker and change over time, so confirm specifics with your own brokerage.

The $25,000 PDT Minimum, and Why It's Changing

For more than two decades, FINRA Rule 4210 flagged any customer of a FINRA member firm who executed four or more day trades within five business days — provided those trades exceeded 6% of the account's total trading activity in that window — as a "pattern day trader." Once flagged, the account was required to maintain at least $25,000 in equity before placing any further day trades in a margin account. Fall under that line, even by a small amount, and the account lost day-trading privileges until equity was restored, regardless of how the shortfall happened — a loss on a position, a withdrawal, or simply a stretch of low account value.

That framework changed in 2026. On April 20, 2026, FINRA published Regulatory Notice 26-10, and the SEC approved amendments to Rule 4210 that eliminate both the day-trade-count threshold used to designate an account as a pattern day trader and the flat $25,000 equity requirement tied to it. The amendments took effect June 4, 2026, with an 18-month phase-in running through October 20, 2027 for firms that need additional time to build out the required systems. In place of a fixed dollar floor, firms are moving toward intraday, exposure-based margin monitoring — sizing the margin requirement to a customer's actual market exposure and margin deficiency at points throughout the trading day, rather than applying a single categorical label and a single categorical dollar minimum.

Practically, this means the flat "$25,000 to day trade" rule of thumb is no longer a fixed, universal number, and because the phase-in period runs into late 2027, exactly how any individual broker has implemented the new standard can differ firm to firm in the interim. If frequent day trading in a margin account is part of the plan, confirm directly with the broker how day-trading margin is currently calculated rather than assuming the old $25,000 line still applies unchanged. See The Pattern Day Trader Rule for a full walkthrough of how the PDT designation worked historically, what the day-trade count and 6% threshold actually measured, and how the transition to exposure-based margin is playing out.

Practical checklist

• Don't assume the $25,000 figure is a universal brokerage account minimum — it never applied outside margin accounts flagged for pattern day trading, and it's now being phased out entirely.
• Ask your specific broker how they currently calculate day-trading margin exposure, especially during the 2026–2027 transition window.
• A cash account, funded without borrowing, was never subject to the PDT equity threshold and isn't subject to the exposure-based standard that replaced it either.

FINRA Maintenance Margin: The 25% Floor

Separate from — and more broadly applicable than — the PDT framework is FINRA Rule 4210's maintenance margin requirement, which applies to any margin account, whether it day trades or not. Once a margin purchase settles, the investor must continue to maintain equity equal to at least 25% of the current market value of long securities positions in the account. Equity, in this context, is the market value of the positions minus the debit balance owed to the broker for the borrowed portion. This 25% figure sits downstream of Regulation T's initial margin requirement, which generally requires an investor to fund at least 50% of a marginable equity purchase in cash at the time of purchase; the 25% maintenance figure is the ongoing floor that applies afterward, as prices move.

Two things push the effective requirement above FINRA's bare 25% floor. First, individual brokerage firms set their own "house" maintenance requirements, and a house requirement can be — and very commonly is — stricter than FINRA's minimum; 30% to 40% on standard long equity positions is typical industry practice. Second, both FINRA and individual brokers apply meaningfully higher requirements to positions considered riskier: low-priced or thinly traded stocks, single-name concentration beyond a set percentage of account value, and securities the firm has flagged as unusually volatile can all carry house maintenance requirements well above the general 30%–40% range, in some cases approaching 100% of market value for individual securities a broker considers particularly risky to hold on margin. A broker is always free to require more equity than FINRA's rule demands; it is never permitted to require less.

Short positions follow a related but distinct maintenance schedule under Rule 4210: for stock priced under $5 per share, the requirement is generally the greater of $2.50 per share or 100% of current market value; for stock priced at $5 or more, it's generally the greater of $5 per share or 30% of current market value. The mechanics differ from the long-position schedule because a losing short position increases in market value rather than decreasing, so the required cushion has to scale differently.

Practical checklist

• Know your specific broker's house maintenance percentage — it's usually published in the account agreement or margin disclosure documents, not just assumed to be FINRA's 25%.
• Check whether any of your holdings are individually flagged for a higher house requirement due to volatility, low price, or thin liquidity.
• If a single position makes up a large share of account value, expect the effective requirement on that position to be higher than the account-wide baseline.

How a Maintenance Call Differs From Falling Below the PDT Threshold

Because both involve an equity number and a broker restriction, it's easy to conflate a maintenance call with falling below the old PDT equity threshold, but the two measure fundamentally different things.

A maintenance call is triggered purely by value: the current market value of margined long positions relative to the debit balance owed the broker has fallen enough that account equity, expressed as a percentage of that market value, drops below FINRA's 25% floor or the broker's higher house requirement. This can happen to any margin account — one that trades once a month, one that's never placed a day trade, one that's simply holding a long-term position that declined sharply. It has nothing to do with trading frequency.

Falling below the (historical) PDT equity threshold, by contrast, was about eligibility to place further day trades, not about whether existing positions were underwater. An account with $22,000 in equity and fully paid-for, profitable positions could still have been restricted from day trading if it had been flagged as a pattern day trader, simply because its equity sat under the $25,000 line — independent of whether any position had lost value. Under the new exposure-based standard that replaced this framework in June 2026, the mechanism has shifted to sizing a margin requirement to actual intraday exposure rather than applying a fixed dollar floor once a trade-count threshold is crossed, but the underlying distinction still holds: this line of enforcement is about trading eligibility and exposure sizing, not a value-decline trigger.

The practical upshot is that these two triggers can occur independently. An account can face a maintenance call without ever having been near a day-trading restriction, and — under the old framework — an account could have lost day-trading privileges without any position being underwater at all. Treating them as the same event, or assuming compliance with one implies compliance with the other, is a common and consequential misunderstanding.

What Actually Happens When an Account Is Under-Margined

The operational mechanics matter as much as the percentages, because this is the part that catches traders off guard. Margin calls come in two forms, triggered at different points in the life of a position, and brokers have similar discretionary power to act on both.

A Regulation T call ("Reg T call") arises at the moment of purchase, when the investor hasn't deposited the initial margin the Federal Reserve's Regulation T requires — generally 50% of a marginable equity security's purchase price. This is a funding-shortfall call: the trade was placed but not properly funded up front.

A maintenance call arises afterward, once a position is already funded and settled, when its market value declines enough that ongoing equity falls below the 25% FINRA floor or the broker's house requirement. This is a value-decline call: the trade was funded correctly at the time, but subsequent price movement eroded the cushion.

In both cases, margin agreements signed at account opening typically give the broker broad discretion to liquidate positions to eliminate the deficiency without prior notice to the account holder, and without regard to which specific position the investor would have preferred to sell, the resulting tax consequences, or whether the investor was already in the process of depositing funds. This discretionary authority exists precisely because the broker, not the investor, is on the hook for the borrowed amount if the position keeps declining before the call is met — so the incentive to act fast is the broker's, not the investor's. A deposit or partial sale that resolves the deficiency before the broker acts generally avoids forced liquidation, but there's no guaranteed window; a fast-moving price decline combined with a broker's internal risk policies can result in a sale within the same trading session the call was issued, sometimes before the account holder is even aware a call has occurred.

Worked Example: Calculating a Maintenance Call

Realistic scenario — for education only.

Assume a trader opens a margin position by buying $60,000 of a stock, funding it with the Regulation T minimum: $30,000 in cash, borrowing the remaining $30,000 from the broker (a debit balance of $30,000). At the time of purchase, equity is $30,000, or 50% of market value — well above any maintenance requirement.

The stock then falls 40%, and the position's market value drops from $60,000 to $36,000. The debit balance owed to the broker doesn't change with the stock price — it's still $30,000. Equity is now market value minus debit balance: $36,000 − $30,000 = $6,000. As a percentage of current market value, that's $6,000 ÷ $36,000 ≈ 16.7% equity.

That 16.7% is below FINRA's 25% floor, so the account has a maintenance deficiency even under the bare regulatory minimum. The dollar amount needed to satisfy FINRA's 25% requirement is: (25% × $36,000) − $6,000 = $9,000 − $6,000 = $3,000. If the broker's house maintenance requirement is 30% rather than FINRA's 25% — a realistic, common house policy — the deficiency is larger: (30% × $36,000) − $6,000 = $10,800 − $6,000 = $4,800.

Depositing cash directly resolves the call dollar-for-dollar, since new cash increases equity without changing the market value used in the calculation — depositing $4,800 in this example brings equity to $10,800, exactly 30% of the $36,000 market value. Selling shares also works, but it reduces market value at the same time it reduces the debit balance (from the sale proceeds), so the arithmetic is different and generally requires selling more than the raw dollar deficiency to reach the same percentage. Either way, until the deficiency is resolved, the position is exposed to discretionary liquidation by the broker regardless of the trader's stated intent to deposit funds.

Misconceptions Versus Reality

Common Mistakes

Treating $25,000 as the number to know and ignoring the 25% maintenance rule entirely. Because the PDT dollar figure is so widely repeated, many traders learn it and stop there, without ever learning FINRA's 25% maintenance requirement — the rule that actually applies to every margin account, day-trading or not, and the one most likely to trigger a forced sale during an ordinary market decline. The PDT number is also now a moving target during the 2026–2027 transition, while the maintenance margin rule has stayed stable.

Assuming a margin call gives a comfortable window to react. It's common to see a margin call notification and plan to "deposit funds tomorrow," treating the call as a soft warning rather than an active deficiency the broker is entitled to resolve immediately by selling positions. Depositing cash or reducing exposure as soon as a call is identified, rather than at the account holder's convenience, is the only way to retain control over which positions get sold.

Risks, Limitations, and Exceptions

• This guide describes general FINRA Rule 4210 requirements and typical industry practice; specific broker policies, timing, and house requirements vary and should be confirmed directly with your own brokerage.
• FINRA's replacement of the pattern day trader framework with an intraday, exposure-based standard is in an 18-month phase-in through October 20, 2027; how individual firms implement it can differ during that window.
• Maintenance margin requirements can change without individual notice to account holders — a broker can raise a house requirement, including on a specific security, at its discretion.
• The worked example in this guide uses simplified, hypothetical numbers for illustration and doesn't reflect any specific broker's actual policies or fee structure.
• Margin trading carries the risk of losses exceeding the amount deposited, since losses are calculated against the full position value, not just the cash portion contributed.
• Options, futures, and other derivatives carry separate, often more complex margin frameworks not covered in this guide.

Frequently Asked Questions

Sources and Methodology

This guide describes FINRA margin rules and the 2026 pattern day trader rule change based on publicly available regulatory guidance as of mid-2026. Key sources include:

• FINRA Rule 4210 (Margin Requirements): FINRA's rulebook text sets the 25% maintenance margin requirement for long equity positions and the related maintenance schedules for short positions referenced in this guide.
• FINRA Regulatory Notice 26-10: Published April 20, 2026, this notice describes the amendments to Rule 4210 eliminating the pattern day trader designation and the $25,000 equity threshold, effective June 4, 2026, with an 18-month phase-in through October 20, 2027.
• Federal Reserve Board Regulation T: Regulation T sets the 50% initial margin requirement for purchasing marginable equity securities, referenced here as the funding baseline that precedes ongoing maintenance margin requirements.

The worked example in this guide uses simplified, hypothetical numbers constructed for educational purposes and doesn't reflect any specific broker's actual house requirements or fee structure.

This content was reviewed by the Swoopr Editorial Team in August 2026 and reflects publicly available information at that time. Margin rules, house requirements, and the ongoing PDT-to-exposure-based transition are subject to change; treat this guide as a framework for understanding these mechanics rather than a substitute for your own broker's current policies.

Conclusion

Two different equity thresholds govern whether a margin account stays open and in good standing: the historical $25,000 pattern day trader minimum, now being replaced by exposure-based intraday margin monitoring, and FINRA's more broadly applicable 25% maintenance margin requirement, which can be higher still under a broker's house policy. Confusing the two — or assuming meeting one protects against the other — is a common and costly mistake, because a maintenance call can hit an account that never day trades at all, and brokers hold broad discretion to liquidate positions without notice once either kind of call is triggered. Understanding both numbers, and the mechanics behind a Reg T call versus a maintenance call, is the difference between reacting to a margin call in time and finding out about it after the broker has already sold.

Related Reading

• Brokerage and Trading Rules — the parent hub for this content group, covering the full range of brokerage and trading rules topics.
• The Pattern Day Trader Rule — a closer look at how the PDT designation worked and how the 2026 transition to exposure-based margin is playing out.
• Regulation T Margin Requirements — how the 50% initial margin requirement works when a margin purchase is first placed.