My question is that do you need 25k to be able to have access to day trading with margin or just to simply day trade? For example, if I deposit 10k and I only day trade one position at a time, never exceeding 10k, would that be okay? Or would I still need to deposit 25k, even though I would never use margin.
You can daytrade with $10k cash. However the 3 day settlement time will severely cramp how many trades you will be able to do per week. Having a margin lets you bypass the 3 day settlement time, but requires $25k.
If you make four or more round trip trades in any rolling five business day period, you are considered a day trader and must maintain an equity balance in your account of at least $25,000. I believe that is an industry wide regulation and isn't specific to any brokerage firms. If you bust the four round trip trade limit and aren't able to get your equity account up to $25,000, your account is suspended to closing positions only for 90 days, or until your balance reaches $25,000. You can day trade with less than $25,000 but you would have to settle with making three in one day and then waiting a week to make more, or you would have to spread them out. Not being able to open and close positions at will in this volatile market has been tough. The day trading restriction really hampered my willingness to buy additional stocks. I've had to hold a few overnight I didn't want to because I had used up my allowable day trades stopping out. I had no intentions of being a day trader when I recently started but the market conditions have made me into one, it seems.
i think they made the rule after 2000 when everyone lost their shirts daytrading. I do know in the 1930's they changed to margin requirements for individuals before then people where levered up on borrowed money with the market going up