Trading Options Rules

B

bender271

Hi,
Does day trading rules also apply to options if you buy and sell the same option contract the same day?
Give me a feedback on the idea of daytrading options. I don't see anyone doing it, so it might be either very stupid or impossible. I've been doing this on TOS paper trade and am pretty good at it but don't know if it will work in real life.
 
If you are talking about something like OX not allowing more than 4 or whatever in a 5 day period, I am pretty sure yes, same rules apply.

If not, what rules are you talking about?
 
Quote from bender271:

Hi,
Does day trading rules also apply to options if you buy and sell the same option contract the same day?
Give me a feedback on the idea of daytrading options. I don't see anyone doing it, so it might be either very stupid or impossible. I've been doing this on TOS paper trade and am pretty good at it but don't know if it will work in real life.
More...


Bender,

If you have a margin account with less than $25,000 in it,
you can only day trade options 3 times a week.
A margin account with $25,000 or greater can do unlimited option day trades.

If you have a cash account with less than $25,000, you can do option day trades up to the total cash value of your account one time per day.
Example:
$10,000 cash account.
$500 used per option trade.
$500 X 19 trades = $9,500
19 X $1 Comm = $19 X 2 (in and out) = $38 Commission
$9,538 used in day trades.
Now you need 1 business day for those trades to settle.
So the next day you can do it again.
 
Quote from jeffalvinson:

Bender,

If you have a margin account with less than $25,000 in it,
you can only day trade options 3 times a week.
A margin account with $25,000 or greater can do unlimited option day trades.

If you have a cash account with less than $25,000, you can do option day trades up to the total cash value of your account one time per day.
Example:
$10,000 cash account.
$500 used per option trade.
$500 X 19 trades = $9,500
19 X $1 Comm = $19 X 2 (in and out) = $38 Commission
$9,538 used in day trades.
Now you need 1 business day for those trades to settle.
So the next day you can do it again.
More...

THANK YOU! That's just what I wanted.
 
Quote from Tums:

there are diff treatment between single stock option and index options.
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where can i find out more about rules on single stock options?
like what happens if i buy 10 contracts of apple and sell them 10 minutes later and do this on a daily baisis.
 
Pattern Day Trader rule applies to options and stocks, so if you want to avoid it without the $25K account then trade futures and/or options on futures.
 
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