When engaging in day trading of options through multi-leg orders, moomoo will calculate the number of your day trades according to how you open or close a strategy position. (For general rules on day trading, please refer to here.)
Here are the rules for calculating the number of day trades in common scenarios:
If you open and then close a position in the same option strategy through a multi-leg order within a trading day, this counts as one day trade.
• You place a two-leg order (buying XYZ Put 20 and selling XYZ Put 15) to open a position in XYZ Long Put Spread that expires on November 18, 2022;
• Then you place another two-leg order (selling XYZ Put 20 and buying XYZ Put 15) to close the above position on the same trading day;
• This counts as one day trade.
• You place a four-leg order (buying XYZ Put 9, selling XYZ Put 14, selling XYZ Call 19, and buying XYZ Call 24) to open a position in XYZ Iron Condor that expires on November 18, 2022;
• You place a four-leg order again (selling XYZ Put 9, buying XYZ Put 14, buying XYZ Call 19, and selling XYZ Call 24) to close the above position on the same trading day;
• This counts as one day trade.
If you open a position in an option strategy through a multi-leg order, and then close it through multiple common orders on the same trading day, the number of day trades will depend on the number of trades filled to close the position.
• You place a two-leg order (buying XYZ Put 20 and selling XYZ Put 15) to open a position in XYZ Long Put Spread that expires on November 18, 2022;
• Then you place a common order to sell the above XYZ Put 20 and buy the above XYZ Put 15, respectively, on the same trading day;
• This counts as two day trades.
• You place a four-leg order (buying XYZ Put 9, selling XYZ Put 14, selling XYZ Call 19, and buying XYZ Call 24) to open a position in XYZ Iron Condor that expires on November 18, 2022;
• Then you place a common order to buy the above XYZ Call 19 and XYZ Put 14, respectively, on the same trading day;
• Again, you place a two-leg order (selling the above XYZ Put 9 and XYZ Call 24) to close the remaining position on the same trading day;
• This counts as three day trades.
If you open a position in a strategy via multiple common orders, and then close it via a multi-leg order on the same trading day, the number of your day trades will depend on the number of trades filled to open the position.
• You place a common order to buy XYZ Put 20 and sell XYZ Put 15, respectively, both expiring on November 18, 2022, and thus form XYZ Long Put Spread;
• On the same trading day, you place a two-leg order (selling XYZ Put 20 and buying XYZ Put 15) to close your position in XYZ Long Put Spread;
• This counts as two day trades.
When you trade options using multi-leg orders, only the rules for calculating the number of day trades will be affected. Your rights and asset-related obligations, the calculation of day-trading buying power (DTBP), or the rules on day-trading margin call (DT Call) after you are designated as a Pattern Day Trader (PDT) remain the same. (For general rules on PDT and DTBP, please refer to here.)
This content is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.
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In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request.
Day trading generally isn’t appropriate for someone with limited resources, limited investment or trading experience and low risk tolerance. A day trader should be prepared to lose all of the funds used for day trading. Before considering day trading, read and understand the Day-Trading Risk Disclosure Statement.