Trading Options Rules

Discussion in 'Options' started by bender271, Sep 6, 2007.

  1. bender271


    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.
  2. 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?

  3. 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.
    $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.
  4. Tums


    there are diff treatment between single stock option and index options.
  5. bender271


    THANK YOU! That's just what I wanted.
  6. bender271


    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.
  7. MTE


    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.
  8. How do you trade options on futures?
    That sounds fun
  9. MTE


    CME and CBOT
  10. Oh,

    I thought there was something different
    #10     Sep 7, 2007