Today’s trading tool tip is about the Day Trading counter, which you will only see if you are actually making Day Trades. It’s bold and red and hard to miss, but it’s important you know the facts about Day Trading.
What is a Day Trade?
A Day Trade is a single option or stock position that opens or closes during the same day. A good rule of thumb is that any trade held overnight is not a Day Trade. Simple, right? A few more important details.
1. A sell to close (buy-in) of an existing position will be treated as a liquidation and the subsequent repurchase (sale) will be treated as the establishment of a new position. These trades will not be subject to the rules affecting Day Trades. Any other trades in the overnight position will be considered a Day trade and subjected to Day Trading rules.
Huh? All this means is that if you close something completely and then buy more of it, you aren’t making a Day Trade. (more…)
