Margin Account

A margin account is a brokerage account in which the broker-dealer lends the investor cash, using the account as collateral, to purchase securities. Margin increases purchasing power and also exposes investors to larger losses. The pattern day trader rule is being replaced, and that's covered further down.

What investor.gov actually names

The investor.gov glossary definition is short: a "margin account" is a type of brokerage account in which the broker-dealer lends the investor cash, using the account as collateral, to purchase securities. Margin increases investors' purchasing power, but also exposes investors to the potential for larger losses. Put plainly, it's a loan against your account. It isn't an edge, and it doesn't get you better fills.

A cash account has no loan in it: you pay with cash you have. House rules can be stricter than the rulebook.

The rule now: intraday margin under Rule 4210(d)(2)

FINRA Regulatory Notice 26-10 (published April 20, 2026; effective June 4, 2026) replaced the pattern-day-trader framework in its entirety with intraday margin in Rule 4210(d)(2). Firms that need more time may phase in through October 20, 2027. So the new rule is in force, but your broker may still be phasing it in.

The new term is intraday margin requirements. After a trade that reduces intraday margin, your broker works out an intraday margin deficit (IMD) on the customer margin account (other than a good-faith or portfolio-margin account). Real-time blocking is allowed. A single end-of-day calculation is also allowed. Regular maintenance is a separate requirement; (d)(2) supplements it.

FINRA Rule 4210(b)(4) puts the minimum at $2,000 of equity to buy on margin. Your broker can ask for more, not less. It's the floor for using borrowed money, not a day-trade count, and not "the new PDT." Rule 4210(c)(1) sets maintenance margin at 25% of the market value of what you hold long on margin, and house rules can be higher.

The pattern day trader rule is being replaced

The pattern day trader rule page explains the old setup. Its day-trade count, the day-trading buying-power formula that went with it, and the $25,000 equity floor were replaced under FINRA RN 26-10, effective June 4, 2026, and firms can phase that in through October 20, 2027. Once your broker has switched, there's no PDT flag to work around. Intraday buying power is your broker's number, so I won't turn a $10,000 account into some multiple of itself and call that a rule.

A stop-loss order is still a trigger, not a fill. Leverage does not make the trigger a guarantee. Session clocks still bind: Early 4:00 a.m. versus 7:00 a.m. ET is an exchange split. Exchange overnight 9:00 p.m.–4:00 a.m. ET is planned for December 6, 2026, not live. Cboe C1 equity-options Global Trading Hours is TBA. The times are on the U.S. session hours 2026 page. Broker overnight is ATS access, not exchange overnight. Buying power your broker shows you overnight doesn't mean an exchange is open.

An example: size from the stop, not a margin multiple

These numbers are made up to show the method. They aren't a real trade, a margin call or a Regulation T quote. Account $10,000. Risk 1%, which is my example and not a required rate → $100 dollar risk. Entry $53.00, stop $51.50 → $1.50 per share. Shares = 100 ÷ 1.50 = 66.666… → 66 shares, round down (actual dollar risk $99; notional 66 × $53.00 = $3,498). Same three lines as dollar risk per share. Run it on the risk calculator; it's laid out for crypto, so read the unit as shares and round down. The full course on this is Risk Management 101 for Stocks.

That 66-share row is not "what 4210 lets you buy." If house buying power is larger, you still size from the stop; if smaller, the house number binds. Leverage does not increase the dollars you are allowed to lose. Your broker works out the intraday margin deficit, not you and not this site.

Here's a made-up example of what leverage does, not a quoted margin rate: $5,000 cash posted against a $10,000 long versus $10,000 cash for the same long. A drop to $8,000 is a $2,000 loss either way. On $10,000 cash that is 20% of cash posted. On $5,000 cash plus a $5,000 loan, equity is $3,000: a 40% hit to cash posted, and you still owe the loan.

FAQ

What is a margin account?

investor.gov: a brokerage account in which the broker-dealer lends the investor cash, using the account as collateral, to purchase securities. Margin increases purchasing power and exposes investors to the potential for larger losses. It is a loan, not a cash account.

Is the Pattern Day Trader rule still current law?

No. RN 26-10, effective June 4, 2026, replaced the PDT framework with Rule 4210(d)(2) intraday margin. Brokers have until October 20, 2027 to make the switch, so yours may still run the old $25,000 rule for a while. Ask. The old day-trading buying-power math goes away with that switch.

Is the $2,000 figure the new PDT?

No. $2,000 is FINRA's minimum equity to buy on margin, and brokers can set it higher. It has nothing to do with how many day trades you make.

Does buying power change how I size shares?

It can cap what your broker will let you buy. It doesn't raise how much you can afford to lose. Same example: $10,000, 1% = $100, $1.50 per share → 66 shares, round down. If house buying power is smaller, the house number binds.

Is there a live intradaily-margin calculator on this site?

No. Your broker works out the intraday margin deficit under its own written procedures, and there's no calculator for it on this site. The risk calculator is fine for a stop-distance share count, as long as you read its unit as shares and round down.

Educational only. Not financial, tax, or legal advice. Not a broker comparison. Margin is credit; you can lose more than you deposit. Sources: investor.gov's margin-account glossary, FINRA RN 26-10, and Rule 4210(d)(2).