The New Daytrading Margin Rules: A Primer

Many readers asked for more information on the nitty-gritty of the new daytrading margin rules, which will soon take effect.

To recap, on Aug. 27, the New York Stock Exchange, and on Sept. 28, the National Association of Securities Dealers will raise the minimum account balance at member firms for "pattern" daytraders who trade on margin. The new rules require at least $25,000, up from the current $2,000.

The regulation would apply to accounts that execute at least four daytrades (positions that are opened and closed in a single session) a week, but would exempt those for which daytrades are 6% or less of all transactions. The rule also says that funds used to meet margin requirements must stay in the accounts for at least two days. ...