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  1. Default Options Trading Rules - Need Your Help

    Hi Experts,

    I am new for option trading and I need your help in this.

    I just opened an options account with opening balance of 5K. Today I bought:
    MCP - 55 Calls
    MCP - 60 Calls
    SNDK - 41 Calls
    and sold them out after couple of hours, that means I made 6 trades today.

    Note: Total transaction was under 5k, I didn't use any margin money.

    I read somewhere that you can't make more than 4 trades in 5 days otherwise you have to deposit 25k in your account or your account will get locked for 90 days.

    Can you please help me out what did I do wrong here?

  2. Default

    I've never heard of that before, what brokerage are you with? The only thing I've heard of that's anywhere close to something like that is Regulation T which states that you can't trade with unsettled funds for intraday trades. What I mean by this is that in your case you couldn't enter and exit trades in total of more than $5000 in a single trading day.

  3. Default

    Hmmm. I think you may be on to something. I will cut and paste from an email I got from TDA today.

    [FONT=Arial, Helvetica, sans-serif]The FINRA currently defines day trading as purchasing and selling, or short selling and purchasing to cover, the same security on the same day. A pattern day trader is defined as someone who makes four or more round-trip day trades in a five-business-day period, unless this activity is less than 6% of total trading activity in that period.

 

 

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