When is exercising an option and selling the stock considered a day trade?
Asked 4 years ago
I didn't open an option, I exercised one today, and I would like to sell them now. But if I do, will it be considered a day trade?
Andia Rispah Igobwa
Thursday, June 10, 2021
A day trade is the buying and then selling on the same day. Or selling short and then buying back the same security on the same day.
For example, you can buy the same stock in three trades on the same day, then sell all of them in one trade. That can also be considered as a one-day trade or three-day trades.
Andrew Moran
Monday, June 21, 2021
To be clear, buying/selling a stock or exercising an option on the same day is not categorized as a day trade. Instead, it will be identified as a single-day trade.
According to FINA regulations, a day trade is when an investor buys and sells the security on the same day in a margin account, or selling short and purchasing to cover the same security on the same day is labeled as a day trade.
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