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– Bryan Bottarelli, MTA Co-Founder
The SEC simply eradicated the $25,000 sample day buying and selling requirement.
I’ve been complaining about this for years. Final week, lastly, it obtained mounted.
Right here’s the fast background…
The sample day dealer rule was created in 2001 after the dot-com crash. Regulators determined that anybody making 4 or extra day trades in 5 enterprise days wanted to keep up $25,000 of their account or face restrictions.
It was meant to guard retail merchants from themselves, however what it truly did was lock out hundreds of thousands of smaller buyers from actively buying and selling their very own cash.
That modifications now. The SEC accredited the elimination of the rule on April 14.
The $25,000 requirement is gone. Day trades will not be counted. Brokerages will monitor danger publicity in actual time as a substitute of penalizing merchants for the way ceaselessly they commerce.
Merchants of all account sizes can now react to markets the way in which professionals have all the time been in a position to… and make the trades they need to make. It’s a win for all merchants.
However a fair greater winner is already rising: Robinhood (HOOD).
Right here’s why this issues particularly for HOOD…
Robinhood’s whole enterprise is constructed across the smaller retail dealer. The typical buyer account steadiness is nicely beneath $25,000.
The PDT rule was hitting HOOD’s core demographic tougher than another brokerage.
With the rule gone, that friction disappears. The merchants who have been most restricted, Robinhood’s precise buyer base, can now commerce freely. Which means extra exercise, extra quantity, and extra income for Robinhood’s platform.
The numbers already mirror the energy of this enterprise. Robinhood ended 2025 with file annual income of $4.5 billion and internet earnings of $1.9 billion.
Complete platform belongings sit at $314 billion throughout 27.4 million funded prospects.
The variety of gold subscribers, HOOD’s premium tier, is up 58% yr over yr. The prediction markets section, a product that hardly existed a yr in the past, is rising at 286% yearly.
This rule change doesn’t simply assist Robinhood on the margin. It removes the largest structural barrier to development of their goal market.
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You’ll be able to see how the inventory moved sharply increased off this information final week.
I feel the upside may simply proceed. As new merchants commerce extra ceaselessly with out having to keep up a $25,000 account steadiness, HOOD may simply return to $100 per share and above.
Yet one more catalyst value noting: HOOD experiences Q1 2026 earnings on April 28 – simply eight days from now. Wall Road consensus sits at $103.77.
That’s one other potential leg increased proper across the nook.
Given this new rule, I take into account HOOD a purchase on any dips again into the $80s.