SEC and FINRA Eliminate $25K Day Trading Threshold, Starting June 4

According to MarketWatch, on June 4, the SEC and FINRA formally eliminated the Pattern Day Trading Rule, which has been in place for over 25 years. Investors with accounts below $25,000 can now freely engage in day trading, with brokers having up to 18 months to implement the changes, though some may do so within days.

However, research shows the regulatory change may not benefit most retail traders. A study by scholars Brad Barber, Yi-Tsung Lee, Yu-Jane Liu, Terrance Odean, and Zhe Zhang found that approximately 95% of day traders ultimately face losses, with only about 5% achieving consistent long-term profits.