I'm trying to get a friend of mine interested in day trading with equity options. Though she will not have more than $300 USD at risk in any one trade, she would still be subject to FINRA with her own account, which is less than 10k in size? Are there any alternatives for her regarding this?
Ok so if she were to get in and out of a single symbol (spy for instance), multiple times in a single day, over four days consecutively, and then waited a week or ten days to do it again, she would be able to with a small account?
Ironically it's actually safer to daytrade stocks and ETFs because it would be $1/tick of movement for a 100-lot. PDT rules force inexperienced, undercapitalized traders into futures where ES ticks are $12.50, YM and NQ are $5
If listing from the least amt of leverage to the most. 100 shares of stock or exchange traded fund - least leverage (example symbol SPY) 1 equity option contract controls 100 shares - more leverage than above (example symbol SPY170224C235) 1 future (e-mini) - more leverage than above (example symbol ??) 1 option on future (e-mini) - more leverage than above (example symbol ??)
Even with that Pattern Day Trader rule in effect, assuming that person is good, ...their tiny account will reach that requirement rather quickly, And, if Not good...consider that rule or regulation in place...a blessing for you. and everyone else...from potentially losing more of their money faster,
Robert, can you comment on the PDT rule in terms of SPY options? Also, does this change if you are not a US resident or trading in the US. Thanks.
DT is enforced by all US registered firms with both equities and options. As a side note, I don't know if includes bonds and other fixed income. It does not include futures which are not regulated with the SEC or Finra. I have no knowledge of what is required for a foreign broker that has a foreign client trading US Equities/options or if a US person or firm can open a foreign account and not be subject to these rules. Outside my wheel house.