SEC Removes Day-Trading Limits for Small Investors, Robinhood Shares Rise
The U.S. Securities and Exchange Commission approved major changes to long-standing limits on day-trading by small investors, a shift welcomed by retail brokerages. Shares of Robinhood, Webulland Torotraded higher on the news, all outperforming in Wednesday morning trading.DAY-TRADING LIMIT REMOVED:The SEC has approved changes to the pattern day trading rule, shifting from a fixed $25,000 threshold for small investors to risk-based margin requirements applied to all traders. Public feedback "overwhelmingly supported" the plan, which includes the "elimination of the $25,000 minimum equity requirements and definition of pattern day trader," SEC Assistant Secretary Sherry Haywood wrote in an order.Steve Quirk, chief brokerage officer of Robinhood, said in an email viewed bythat FINRA's updates were a "significant step forward in empowering retail investors." "By eliminating antiquated barriers, this change better reflects the modern trading landscape and ensures everyone has the freedom to invest and participate in the markets on their own terms," Quirk said.Reforms to pattern day trading restrictions are "long overdue," said Anthony Denier, group president of Webull, according to the publication.PRICE ACTION:Shares of Robinhood and Webull rose over 8% to $85.57 and $6.31, respectively, in morning trading, while Toro gained about 1% to $3.94.
