Schwab Updates Day Trading and Margin Rules

Starting June 8, Schwab will no longer count day trades in margin accounts after the Securities and Exchange Commission (SEC) approved scrapping the old rules, including the pattern day trader (PDT) designation and the $25,000 equity requirement.

The old rules will no longer be in effect as of June 4, 2026, although individual brokerages will have up to 18 months to implement the new ones. As part of the changes, brokerages will no longer count day trades or flag accounts for pattern day trading based on the frequency of day trades.

Starting June 8, Charles Schwab will no longer restrict accounts based on the frequency of day trades and account balances or open any new PDT-designated accounts. As of that date, PDT accounts below $25,000 will have their PDT status removed and can day trade with their available buying power.

However, Schwab account owners with a balance above $25,000 and previously designated as PDT will continue to see Day Trading Buying Power reflected in their account as long as their equity remains above $25,000 at the start of the day. If the equity falls below that level, Schwab will remove the PDT designation and any related trading restrictions, which will permanently remove the Day Trading Buying Power, allowing these account owners to day trade freely with their available buying power.

Schwab will soon introduce Intraday Margin Buying Power for all eligible margin accounts. Intraday margin buying power will represent the value of funds available to open intraday positions. It will be based on an account's equity and open positions and will be updated in real time based on the movement of any open positions. Displayed intraday buying power will apply to securities with a standard intraday margin requirement of 25%.

Under the new rules approved by the SEC, brokerages will be permitted to either monitor accounts for margin shortfalls in real time or perform a single check at the end of each trading day. Firms that opt for real-time monitoring—as Schwab has—may block trades that would create or increase intraday margin deficits.

On July 13, Schwab will introduce Intraday Margin Buying Power for all eligible margin accounts with at least $2,000 in cash or eligible securities. Intraday Margin Buying Power represents the dollar amount a client can trade during the day in eligible securities with a 25% margin requirement.

Standard Regulation T (Reg T) requirements aren't going away—they're being supplemented by this new intraday capability, which is meant to offer increased leverage and flexibility during the trading day. In practical terms, the change means clients may be able to trade larger positions during a session than they could hold overnight.

Under Reg T, traders are generally limited to borrowing up to 50% of the value of marginable securities. By contrast, Intraday Margin Buying Power is based on a default 25% maintenance margin requirement for most stocks. This can provide up to four times the buying power intraday—but it also increases risk.

Intraday Margin Buying Power is calculated in real time based on an account's current open positions and their associated margin requirements. Unlike Reg T buying power, this figure can fluctuate throughout the trading day as positions and values change, so it should be monitored with care.

As its name suggests, trades placed using Intraday Margin Buying Power are intended to be opened and closed on the same day. This is another key difference from Reg T, which allows margined securities to be held overnight.

If a client uses Intraday Margin Buying Power to open positions that exceed their overnight buying power, they must exit them by the end of the trading day (8 p.m. ET). If the positions are not closed by then, a margin call may be issued.

Under the new rules approved by the SEC, brokerages will be permitted to either monitor accounts for margin shortfalls in real time or perform a single end-of-day check. Firms that opt for real-time monitoring—as Schwab has—may block trades that would create or increase intraday margin deficits.  

Schwab clients can monitor their buying power for both Reg T and intraday margin on Schwab.com under Accounts, then Balances. On thinkorswim^®, buying power is available on the Monitor tab. Closely tracking buying power and open positions can potentially help traders avoid margin calls and other risks associated with trading on margin.