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Interesting options trading comments:

Frdgrouper

Under the FWIW heading. I know some of you are option traders, so I’m going to suggest you become familiar with rule 390. I was aware of the rule previously only because a friend was wired to the CBOE. I trade on TOS and in May and June traded quite a few options. 390 is as it sounds. If you average more than 390 contracts a day for a month you will be labled a professional “W” for three months. This puts you in the penalty box because price improvement, openning participation etc. are a thing of the past. It is very difficult to trade unless you hit a bid or take an offer under this scenario. There is no warning to this penalty. In fact you really don’t even know you are being punished except that your trades aren’t getting executed. It is up to you to make this discovery. There is a new rule pending where a one month penalty may be applied. I have applied for this but so far no answer. i doubt Charles Schwab will rule for me as opposed to the liquidity providers that pay CS for each order. You would think that 390 is a giant number but the rule counts any cancels or cancel replaced orders as well. There is no running total available so you must keep track on your own. I find it offensive that first time abusers are held to the same standards as serial abusers. Rant over.

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