FINRA Attempt to Change Trading Rule May Cause More Risk: SEC Roundup
Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.
In this episode, Zaccaro and Morgan are joined by Ross Cameron, the founder of Warrior Trading, one of the most recognizable voices in the day trading world, with nearly 2 million YouTube subscribers.
Together, they tackle the long-standing — and long-criticized — Pattern Day Trading (PDT) Rule from FINRA, which requires U.S. traders to keep $25,000 in their accounts to make more than three day trades in a five-day period.
FINRA is moving to reform the rule — reportedly lowering the minimum account balance from $25,000 to $2,000 — and will be seeking approval from the SEC.
Ross shares his firsthand experience navigating this rule throughout his career and explains why it may actually increase risk for new traders. By unlocking four times leverage, the rule effectively encourages overexposure and high-stakes trading — especially for those just starting out. Worse yet, it pushes aspiring traders to use risky offshore brokers or borrow funds just to meet the minimum threshold.
See the video for the discussion.