Pattern Day Trader Rule (PDT)

The Pattern Day Trader (PDT) Rule is the most regressive regulation on this list because it punishes small investors for actively managing risk while wealthy traders face no barrier. FINRA requires a $25,000 minimum equity in accounts that make four or more day trades per week—a threshold set in 2001 that is worth $42,000 adjusted for inflation today. This single rule blocks roughly 90% of retail accounts from day trading, compared to just 2% of institutional accounts that evade the restriction entirely. Its cost is 40% worse than the Accredited Investor Rule’s (rank #2) exclusion effect, because PDT actively prevents risk management through quick exits, forcing small portfolios to suffer bigger losses during volatility. The rule remains unchanged despite FINRA’s own 2020 study finding no evidence it protects investors from harm.