Pattern Day Rule bypassing per example

Quote from cdcaveman:

there is a cost of carry... but its nothing considering the time your in and out.. and yes.. the sale of the same strike put to the purchase of a call offsets the theta.. covering a long position in a day trade would be to sell a call and buy a put.. conversion is what its called... essentially your short stock in a synthetic options position completely offsetting your long position in the underlying..... you can leave it to expiration if you really wanted.. but if the put is in the money you need to call your broker and make sure you excise your put
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The put and call theta are =, yes. The dividend is embedded in the synth, so it may not trade to the penny with shares as the div is not priced in the natural. The forward on the synthetic isn't really an issue at 0.56 in yearly rates.
 
You can do 3 day trades in 5 business (market open) days, not 4 trades. 4 trades makes you a pattern day trader.

Quote from minorearth:

For those unfamiliar, the Pattern Day Rule applies to accounts below $25,000. Only 4 day trades can be made in any 5 business day period. Using a trade in the SPY as an example, could someone tell me if this type of position adjustment, would get around the limits of the pattern day rule.

On Monday morning (Day 1) at 10AM, we buy 100 shares of SPY at $135. Later that day with two more hours of trading left before the 415PM close, the price of SPY has gone up to $136, giving us a $100 profit should we decide to sell. If this is done however, it will count as a day trade, and limit us to 3 more day trades for the next 4 business days. Instead of selling for the $100 profit before the close, we purchase a 138Put option in SPY with 2 weeks to go for $250.

The next day (Day 2), SPY opens around the same price as the day before. We sell back the 100 shares of SPY purchased at $136, and sell the 138Put option from the day before for $250. After making these two trades Tuesday morning (Day 2), no day trade has accumulated, based on how we used options to sidestep the pattern day rule. Is this example feasible?
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Well I see the old gang is still at it. Been off for a couple of months doing cancer stuff.

2011 I lost 30% of my account. 2012 a leetle bit, not sure how much, maybe 1% more, or lets see think I gained 1% back. Lets see what 2013 brings? Still not back up to $10,000 anyway.

I've got to just chalk this up to entertainment. Doing paper trading for next couple of months and diddling with those debit spreads again, trying to figure out how to make them work. Not as much pain these days lately, so can get back on the computer. Everybody seems to be having fun anyway reading this stuff I've missed.
 
falcon,
good to see you back... its just money.. many lose alot before they figure it out.. and some think they have it figured out and dont thats alot worse.. :)
 
A) Get a job and get more money
B) Work a little harder and try to understand what you are trading so you can actually hold it for a while.

Quote from minorearth:

For those unfamiliar, the Pattern Day Rule applies to accounts below $25,000. Only 4 day trades can be made in any 5 business day period. Using a trade in the SPY as an example, could someone tell me if this type of position adjustment, would get around the limits of the pattern day rule.

On Monday morning (Day 1) at 10AM, we buy 100 shares of SPY at $135. Later that day with two more hours of trading left before the 415PM close, the price of SPY has gone up to $136, giving us a $100 profit should we decide to sell. If this is done however, it will count as a day trade, and limit us to 3 more day trades for the next 4 business days. Instead of selling for the $100 profit before the close, we purchase a 138Put option in SPY with 2 weeks to go for $250.

The next day (Day 2), SPY opens around the same price as the day before. We sell back the 100 shares of SPY purchased at $136, and sell the 138Put option from the day before for $250. After making these two trades Tuesday morning (Day 2), no day trade has accumulated, based on how we used options to sidestep the pattern day rule. Is this example feasible?
More...
 
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