The requirements that calculate a maintenance margin based on the largest open position of the previous day’s trading, plus a required minimum equity level of $25,000, have had a big impact on day traders, but the general consensus has been that the regulations are relatively fair and understandable. Here is some stock tips help to understand the SEC’s day trading rules.

Much like more traditional investors and corporations with margin trading accounts, the day trader can trade at a multiple of his maintenance margin (quadruple the amount for the pattern day trader), and has five business days to deposit more capital if his margin level falls below the minimum acceptable level before all open positions will be closed out. If he does not provide more funding within the required five days, he will be restricted to trading only with cash deposited into his account.

In general, the margin rules limit the ability of day traders to take advantage of the former margin requirements framework, which used to calculate margins based solely on overnight positions (of which day traders had none, resulting in a $0 margin), and  creates a much more commensurate maintenance margin.

Additionally, day traders are required to keep any funds they had to add to meet the $25,000 equity minimum or any margin calls within their account but unavailable for trading, for at least two business days. Finally, the margin day trading restrictions also prohibit cross guarantees which allowed short term investors to move much larger amounts of securities than normal margin requirements would.