Hedge - PDT Rules & Options Workaround

Pattern Day Trader (PDT) Rules

Rule:

• Under $25K in margin account → Max 3 day trades per rolling 5 trading days
• Over $25K → Unlimited day trades

Henry's situation:

• Keeps trading account UNDER $25K
• Subject to PDT limits (3 day trades / 5 days)

Options Workaround

Different strikes/expirations = different instruments = NOT same-day round trip

Example:

• Morning: BUY SPY 450 call (Mar expiry)
• Afternoon: SELL SPY 455 call (Mar expiry)
• Result: NOT a day trade (different strike)

Or:

• Morning: BUY SPY 450 call (Mar 15 expiry)
• Afternoon: SELL SPY 450 call (Mar 22 expiry)
• Result: NOT a day trade (different expiration)

Implication for Hedge:

• Options strategies can enable more frequent trading despite PDT limits
• Strategy engine needs to account for PDT tracking
• Options spread strategies are viable for active trading