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Master Option Futures
Learn Option Futures
If you are an online day trader, your job is to trade stocks, options, or commodities. New traders always ask about the difference between stock trading and futures day trading. Let's discuss the following guidelines and see what happens when they are breached.
We will only discuss the relationship between stocks and option as opposed to commodities and futures. The rules governing commodities and futures are the same.
If you have been part of trading for any time, I'm sure you have heard of the 431 Rule. If you perform the same online day trades for five successive business days, rule 431 is a margin requirement.
In addition to that, your day trading should be larger than six percent of your total trading activity. Keeping a margin call can be very tough. As a day trader trading stocks are options with less than $25,000 in your account, you must be aware of trading this money more than 1 time in the 5 day period.
Day trading futures and commodities on the otherhand, don't have any margin requirement. The good thing about day trading futures and commodities is that there is no limit to the number of trades you can make.
I like option futures, but In order for you to trade, you must have an equity of $25,000 in your account. Otherwise, if you trade $5,000 you should cash it out in 10 minutes. That $5,000 can not be traded for 5 days. Strange rule I know, but that is the rule.
You can trade futures and commodities for as low as $500 and this money can be traded with no wait time. You are only allowed to trade three times a week and you will be suspended for 90 days if you trade on the 4th day.
When trading option futures, as a day trader, you can transact as many times as you want. Hence, in my opinion, day trading is a better path to take if your taking multiple trades in a day. When stock trading the amount of $25,000 equity should be maintained in your trading account.
During buying and selling similar stock/option in the same day, do not go into a new trade where the funds from the sale of the stock just sold will be used to acquire a new position. Alternatively, it is best to save the position you have purchased from cash from a previous same day sell. The trading rules I have offered here are the ones I have run across thru all the years i have been doing trade. Learn Option Futures.
You can get all-encompassing info by exploring the online network for online day trading and pattern day trader. Wikipedia can be utilized to get such info.
Happy trading….
Tags: futures, trade future
