What it costs, and the rules that apply

Every trade costs money before it makes any. Those costs are small one at a time, but day traders trade often, so they stack up fast. You also need to know the rules that apply to your account and the basics of how trading gains are taxed.

This lesson covers the costs first, then the rules, then a few general tax facts. I'm not a tax professional, and nothing here is tax advice.

The costs

• Commissions: what your broker charges per trade, or per contract in futures.
• Exchange and regulatory fees: small fees per contract that are passed on to you.
• Market data: real-time prices often carry a monthly fee.
• Platform fees: some charting software charges a monthly fee or a license.
• Slippage: the gap between the price you expected and the price you got.

Here is a made-up example with round numbers. Say your all-in cost on one MNQ contract is $1.50 each way, so $3 for a round trip. That equals 1.5 points, since each point is $2. Trade five times a day for 20 days, and that's 100 round trips, or $300 a month. Add one tick of slippage each way, which is $1 per round trip, and you're at $400 before data and platform fees. Your trades must clear that bar just to break even.

That's one reason most people who day trade lose money. Trading more often doesn't fix a weak edge. It feeds the costs.

The pattern day trader rule has changed

For years, FINRA's pattern day trader rule applied to margin accounts that made four or more day trades in five business days. Those accounts needed at least $25,000. That rule has been replaced.

The SEC approved the new rules on April 14, 2026, and they took effect June 4, 2026. Brokers have until October 20, 2027 to put them in place. Under the new approach, margin accounts over $2,000 get intraday margin set by the broker. Some brokers may still apply the old limits until they switch, so ask yours. The PDT rule never applied to futures.

A few general tax facts

Taxes depend on your country, your situation and the market you trade. These are general US facts only, so check with a tax professional before you rely on any of them.

Futures and Section 1256

Regulated futures contracts in the US fall under Section 1256 of the tax code. Gains and losses are split 60% long-term and 40% short-term, no matter how long you held the trade. Open positions are also treated as sold at fair market value on the last business day of the year. That is often called the 60/40 rule.

Stocks and wash sales

Short-term stock trades are generally taxed differently from futures. Stock traders also need to know the wash sale rule. If you sell a security at a loss and buy the same or a substantially identical one within 30 days before or after, you can't deduct that loss at the time. Day traders who trade the same stock again and again can trip this rule often. How it applies to your trades is a question for a tax professional.

The takeaway

Commissions, fees, data, platforms and slippage are all part of the cost of every trade. Add them up before you start, and measure your results after costs. The $25,000 PDT rule has been replaced, though some brokers may still use it until late 2027. Futures get 60/40 tax treatment under Section 1256. For anything about your own taxes, ask a tax professional.

Do this today

• List every cost your setup would carry, including monthly data and platform fees.
• Work out your round-trip cost per trade in points for the market you'd trade.
• Ask your broker whether it still applies the old pattern day trader limits.

Check yourself

Answer each one in your head, then open it to check.