Discussion in 'Options' started by mizhael, Feb 6, 2009.
Does daytrading with option make sense?
Yes it does...
Look at the volume traded for SPY and QQQQ Feb. options.
Makes sense on high volume, low spread things. You could even scalp limit providing liquidity.
Don't forget margin requirements because you would be considered a 'pattern day trader.'
What margin do you mean here? Yeah if it is $25,000 then I am qualified.
Is that it? I must confess that I'm not familiar with the requirements, but it is not reasonable to believe that anyone with 25k can make an unlimited number of day trades.
Your broker can tell you their requirements, and those are what matters.
Under the rules of NYSE and the Financial Industry Regulatory Authority (FINRA), customers who are deemed "pattern day traders" must have at least $25,000 in their accounts and can only trade in margin accounts. For more information, you can read FINRA's Notice to Members and the New York Stock Exchange's Information Memo.
I am not so sure now myself... given my newbie status... because "margin" can mean lots of different things...
Does anybody know if actually there is any benefit to daytrade options? Given that options traditionally are slow investments, and daytrading cost a lot of energy...
If commissions are going to be a factor for you, that's not good.
Today, commissions are so low that you should be able to ignore them.
You can trade for 70 cents per contract. When I first started as a market maker, I had to pay $1.00 per contract, plus exchange fees. OK, that was 1977, but it's less expensive to be a customer today.
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