OK, I think I know where I misunderstood you. The 3/5 restriction you are referring will not apply if I have far in excess of 25 grand in my account, right? I hope so. So to sum it up, if I have a lot more than 25 thousand in my account and it's a margin account, that I should be able to make as many option trades as I want as often as I want and including those in options prices below 1 buck, right?
Correct, with one possible exception. Of course I'm not even sure what broker you use, so I don't know what rules they apply. The exception is that since options are non-marginable, if you buy enough options that you are left with less than $25,000 margin equity in your account you may be subject to the daytrade restriction. Unless you trade large amounts of options that's unlikely to happen. But it's a possibility.
November 12, 2002 IB Notification US Options Cancellation Fees Dear IB Trader: Recently the US Options Exchanges imposed fees for the cancellation or modification of option orders. As such, IB needs to pass these fees on to our customers. Effective Wednesday, November 13th, IB will charge $1.20 for each US directed option order cancel or modification. This fee will not apply to smart routed orders. For each option order that is executed during the day, IB will provide a credit of $1.20 against the cancellation/modification fees for the day. Interactive Brokers
This is incorrect. Options at IB are subject to PDT with a cash account. I got stuck in the market because of this once.
Haven't been doing much with options, and with this new, obscene 1.20 cancel/change fee, I will be doing ZERO. I suggest all IB users STOP TRADING OPTIONS altogether.
That's their intent, isn't it, to drive us out of the options market. The $1.20 cancel fee for direct-routed orders is not nearly as obscene as restricting us to only close three trades on the day opened within any five days. This cripples our ability to deal with options.
One of my friends who is still having an account with IB told me this afternoon that he feels IB is probably in some sort of financial trouble. His observations are, 1) recently no support stuff available, especially on their web sites. 2) they started to charge fee for order cancellation, which found nowhere with other brokers. 3) they increase minimum balance for commodity trading which is not under SIPC protection. I am not sure if it is true or not. Maybe he was joking. But I feel it is good to let you know for precaution. Just in case.
It's worth taking into consideration. You never know. Of course, other brokers charge so much higher fees for options commissions that they would not need to charge for cancellation fees from the exchanges. The extra fees are already included in their standard commissions.