Does the rule apply to day trading options?
Yes. The day trading margin rule applies to day trading in any security, including options. 4. Does this rule apply only if I use leverage? No, the rule applies to all day trades, whether you use leverage (margin) or not. For example, many options contacts require that you pay for the option in full, that is at 100%. As such, there is no leverage used to purchase the options. Nonetheless, if you engage in numerous options transactions during the day you are still subject to intra-day risk. You may not be able to realize the profit on the transaction that you had hoped for and may indeed incur substantial loss due to a pattern of day-trading options. Again, the day trading margin rule is designed to require that funds be in the account where the trading and risk is occurring. 5. What is a Pattern Day Trader? If you day trade 4 or more times in 5 business days within a single account, you are a Pattern Day Trader. 6. What if I haven’t been a Pattern Day Trader? Is my account considered a
