Per the PDT rule for accounts under 25K, how many daytrades have been made in the following example below? UNG TRADES 9:31 AM 1 UNG Jan 18, 2013 4 put Sold for $47 9:40 AM 1 UNG Mar 16, 2012 4 put Bought for $3 9:50 AM 1 UNG Jan 18, 2013 4 put Sold for $48 10:00 AM 1 UNG Jan 18, 2013 6 call Sold for $66 10:10 AM 1 UNG Mar 16, 2012 7 call Bought for $2 10:20 AM 1 UNG Jan 18, 2013 6 call Sold for $65 10:30 AM 1 UNG Mar 16, 2012 6 call Bought for $6 10:40 AM 2 UNG Jan 18, 2013 6 call Sold for $66 10:50 AM 2 UNG Mar 16, 2012 6 call Bought for $6 AA TRADES 11:00 AM 1 AA Jan 18, 2013 12.5 call Sold for $60 11:10 AM 1 AA Mar 16, 2012 12 call Bought for $4 11:20 AM 1 AA Jan 18, 2013 7.5 put Sold for $51 11:30 AM 1 AA Mar 16, 2012 8 put Bought for $3 SLV TRADES 11:40 AM 1 SLV Jan 18, 2013 24 put Sold for $146 11:50 AM 1 SLV Jul 20, 2012 40 call Sold for $97 12:00 PM 1 SLV Jul 20, 2012 41 call Sold for $84
So a 'day-trade', per PDT rules when using options, involves a trade where the option that is bought or sold at a specific strike price, expiration date, and whether it was a put or a call, is later closed out that same day? (Ex. Buy a Sept AA 13 Call in the morning, and sell that same exact Sept AA 13 Call in the afternoon for a profit or loss.)
yes, that is correct. if you open it and close it the same day then it's a day trade. you can close out a position you held overnight and then re-establish it and that is not a day trade. Open & close = day trade, close & re-open = no day trade
So if I buy an AA Dec 13put option in the morning, then the only way it could be considered a day trade, is if I sold it that same day before the close. If I didn't sell it at the end of the day, but I did sell a Dec 14 put in the afternoon, or sold 100 shares of AA stock, it would not create a day trade situation. It is ONLY if I specifically sell back that Dec 13put, and nothing else?
thats correct. otherwise every time someone traded a spread it would be considered a day trade, right? I think I recall reading once where a firm would consider the exercise and assignment of an ITM spread to be a day trade on the stock which is ridiculous. If there is a firm that still does that it's best to stay away from them.
If you make a round trip in the same trading day, it's a day trade. If you do this four or more times in any five consecutive business day period, you're a pattern day trader. So just pair up your trades and see how many were round trips the same day.
The first part I agree on but not on the second. If the close and re-open occur on the same day, that's a round trip.