Day traders must commit $25,000 in funds to their brokers up front before they can begin short-term trading through a brokerage house – this capital can be in cash, certain liquid securities, or a combination of both, but cross-guarantees cannot be used to meet this $25,000 requirement, and each account you will use to day trade must hold at least the $25k in equity.

In general, once the funds are in, you can trade at 4x the amount of the maintenance margin for the prior business day, though individual brokerage houses can impose their own minimum equity levels and restrict the multiple at which the day trader can invest in trades.

If you create some net losses and need to pledge more capital to meet the equity minimum again, you have five days to do so, during which you will be restricted to trades at a maximum of twice your margin requirements. After five days and if you still haven’t contributed the necessary funds, you can only trade your cash amount until you meet the cash call (or if 90 days passes).

Note that you have to meet the equity minimum even if you never do leveraged trades (on margin trades), like if you only trade options, which almost always require a 100%, in cash commitment. You shouldn’t be day trading in cash accounts, either, to try to avoid the maintenance margin. Short-term trading in cash accounts is almost always prohibited as “free-riding” and will result in your broker freezing your account for three months.

You also have to wait to business days to use any new funds that you had to deposit to satisfy the minimum $25k or any margin calls you might have been subjected to. The reasoning behind all these restrictions, even if you don’t believe you’re engaging in very risky moves, is that something can always go wrong -  the stock tips help that you’ve relied upon could end up losing you a lot of money, and you might not be able to pay back without the maintenance margin as a protective cushion.