Wall Street's new rules 👨‍⚖️

The quarterly earnings calendar is one of the most important drumbeats in the investing world — especially for active investors and short-term traders. That’s why we devote a lot of space in this newsletter to it each month.

But it may be getting a major overhaul soon, courtesy of the White House. On Sep. 15, President Donald Trump posted this message on his social media site, Truth Social:

Here’s the scoop on the potential switch to six-month reporting requirements: how likely it is, and how it might affect the markets.

President Trump’s call to switch to semiannual reporting is not unprecedented. The European Union made a similar change in 2013, and some prominent Wall Street personalities — including Berkshire Hathaway’s Warren Buffett and J.P. Morgan Chase’s Jamie Dimon — have previously endorsed the idea of relaxing quarterly reporting requirements in some way.

For now, the president has only written a social media post about it, not a legally-binding decree. But the Securities and Exchange Commission (SEC) is already working on it. Last week, SEC chair Paul Atkins said his agency would “fast track” the rule change.

Atkins did not give a complete timeline for the change, but said that he hopes to release a detailed proposal for public comment later this year or early next year. That implies that the change would be implemented, at the earliest, sometime in 2026, assuming it doesn’t hit additional snags.

It’s worth noting that the SEC has explored the idea of switching from quarterly to semiannual earnings reporting requirements before. President Trump tweeted about the idea in 2018, during his first term, prompting the SEC to collect public comments on the idea. The change didn’t move forward in 2018, and only time will tell if this push will end differently.

Earnings reporting requirements help provide investors with important information about company performance. One of the best-known stock valuation metrics, the price-to-earnings (PE) ratio, looks at a company’s stock price divided by its earnings per share over the last twelve months to gauge whether it’s undervalued or overvalued compared to its peers.

But there’s also some evidence supporting President Trump’s argument that quarterly reports are too frequent, and may create bad incentives for public companies to focus on short-term results at the expense of long-term strategy.

Last week, Srini Krishnamurthy, a finance professor at North Carolina State University’s Poole College of Management, published an analysis of studies on the positive and negative effects of earnings requirements.

One of the studies Krishnamurthy cited is a 2023 paper published in The Accounting Review, an academic journal. It examined the performance of U.S. public companies between 1962 and 2018, and found a strong relationship between companies’ reported results and their share prices, suggesting that frequent reports are a valuable predictor of a stock’s future returns.

However, Krishnamurthy also cited a 2018 study, also published in The Accounting Review, which looked at U.S. public company behavior between 1950 and 1970 — a period when many companies were just starting to report quarterly results. It found that increased reporting frequency was associated with a large decline in long-term investments by the companies.

“There is a tradeoff here, and shifting to semiannual financial reporting would reduce the reporting burden for firms, as well as the incentives for managerial opportunism,” Krishnamurthy wrote in his analysis.

But he also cautioned that ending quarterly reporting could have unintended consequences. “On the flip side, making financial statements less frequently available to investors could make the market less efficient and exacerbate volatility in prices,” Krishnamurthy wrote.

At this point, it’s uncertain when (or even if) the switch to semiannual reporting would go into effect. Would it improve companies’ long-term planning, or reduce transparency and increase volatility for investors, or all of the above? We’ll have to wait and see.

» MORE: Best brokerage accounts for online stock trading

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If you’re the kind of investor who pays close attention to quarterly earnings reports, you might also be a day trader — someone who buys and sells stocks within a single trading day.

And if you’re a day trader, you may have heard of the pattern day trader (PDT) rule, which imposes minimum balance requirements on traders who make a lot of transactions in a margin account.

But the Financial Industry Regulatory Authority (FINRA) and the SEC are working on relaxing some of those requirements. Below, we’re discussing the rule as it exists today, how you can avoid it, and what to expect from the upcoming changes to it.

FINRA currently defines a pattern day trader as someone who, in a margin account, “executes four or more ‘day trades’ within five business days, provided that the number of day trades represents more than six percent of the customer’s total trades for that same five business day period.”

This effectively means that some investors who place a lot of long-term trades but do a little bit of day trading may be exempt, but the opposite may also be true — if you’re placing only a handful of trades each week but the majority are day trades, you may be considered a pattern day trader.

(This is the minimum, industry-wide criteria for identifying a pattern day trader. Individual brokers may have broader criteria that define more users as pattern day traders; it’s worth reading the fine print for your brokerage account to see how they define the term.)

Under FINRA rules, pattern day traders must maintain a minimum account value of $25,000. This gate keeps a lot of beginner, small-balance investors out of day trading, by design, to protect them from the substantial risks associated with it. The minimum was implemented in 2001, in the aftermath of the dot-com crash, when many retail traders suffered significant losses trading overvalued tech stocks.

Last month, the FINRA Board of Governors approved amendments to the PDT rule that would scrap the $25,000 minimum, and replace it with a more flexible intraday maintenance margin requirement.

Rather than needing to keep a fixed minimum dollar value in their accounts, pattern day traders would just need to keep enough money in their account to avoid margin calls on their positions. This typically means maintaining a balance of at least 25% of the total value of their outstanding positions.

FINRA is expected to seek SEC approval for the rule change soon, which would kick off a months-long process of implementing it. With that in mind, the rule change is likely to become effective near the end of 2025 or early in 2026. When it does, a lot more investors will be eligible to day trade stocks on margin, for better or worse.

» MORE: Best platforms for day trading

These changes to the PDT rule are still awaiting SEC approval at the time of writing, which means that the $25,000 minimum for pattern day traders still stands for now. But there are already several ways to avoid the rule.

The simplest, and perhaps most obvious, is to avoid day trading entirely and stick to long-term investing. Recent studies suggest that day trading is not a winning proposition for most investors, especially retail investors who use brokerage apps.

For example, a 2021 study published in the Journal of Finance looked at the top stocks purchased by Robinhood users each day from May 2018 to August 2020. It found that the average 20-day return on these stocks was -4.7%, implying that many if not most short-term traders on Robinhood end up losing money.

By contrast, historical data shows that long-term investments in index funds have much more reliable returns — the S&P 500 index, for example, has a long-term average annual return of about 10% per year.

But if you really want to try your hand at day trading without worrying about the PDT rule, there’s another workaround: The rule only applies to margin accounts. Cash brokerage accounts, which do not allow users to invest borrowed money, are exempt. Some brokers, such as Robinhood, give all users a margin account by default, meaning that users who want a cash brokerage account must go into the settings menu and actively switch to a cash brokerage account.

It’s important to note that switching to a cash brokerage account has some disadvantages. When you close out a trade, the proceeds from that trade don’t hit your account instantly. They typically take one business day after the trade to settle in your account. Margin accounts allow you to purchase other assets with these incoming funds as soon as you close a trade, without waiting for the trade to settle — but cash brokerage accounts do not.

If you have a cash brokerage account, and you want to sell a stock you own and buy a new stock on the same day, you’ll need enough uninvested cash in your account to buy the new stock. Otherwise, you’ll have to wait one business day after your sale to reinvest the money you earned from that sale. What’s more, certain types of advanced trades, such as short sales, require margin and are not possible in cash brokerage accounts.

For some investors, these restrictions may defeat the purpose of day trading. But if you want to try out frequently buying and selling stocks on a small scale, without coughing up $25,000 to meet the PDT rule minimum or waiting for the upcoming PDT rule change to take effect, using a cash brokerage account is an option.

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*Reports marked with an asterisk may not be released if the government shutdown does not end before that date.

Below is a table of blue-chip stocks that are reporting earnings in October, with the expected dates and average analyst estimates for their upcoming earnings reports.

We’ve filtered the list for companies with a market capitalization of at least $300 billion. These are high-volume stocks of which earnings reports are often major trading events for options traders and day traders.

» See our picks of the best options trading platforms.

Neither the author nor editor owned positions in the aforementioned investments at the time of publication.

*The boosted 4.40% Annual Percentage Yield (APY) is offered on up to $250,000 in deposits for the first 6 months when you open a Cash Account offered by Atomic Brokerage LLC and deposit funds within 14 days. Balances above $250,000 will earn the standard 4.00% APY. After the 6 month introductory period, all balances will earn the standard 3.75% APY. The 4.40% boosted introductory APY is available through NerdWallet’s promotional program. APYs are accurate as of 10/1/2025 and are subject to change without notice. See important Cash Account disclosures at https://www.atomicvest.com/legal/disclosures/7d9c31dd-bf97-46ae-9803-1774b97187af.