What is the 390 Professional Option Order Rule?
If you are a trader that averages 390 options orders per day in a given calendar month, then you could be classified as a professional trader. This rule, adopted by the options exchanges, is designed to identify professional customers who compete with market centers that should not receive priority over retail clients’ orders. The number 390 is derived from the ability to place a new order each minute of the trading day during the ordinary trading day hours of 9:30am to 4:00pm Eastern Time, which is 390 minutes. Any order submitted, even if not filled, is counted towards this limit.
Orders submitted by professional traders will have a lesser priority in order execution compared to non-professional traders and as a result of these orders would require special handling. Currently, Tradier does not support professional trading customers.
This rule was implemented by the CBOE (Chicago Board Options Exchange) and ISE (Nasdaq International Securities Exchange), followed by US Options Exchanges, to address investors that utilized information and technology that would allow them to trade as a market maker or broker-dealer.
Tradier will conduct reviews on a quarterly calendar basis to identify customers who have exceeded the 390-option order threshold for any given month in that quarter. Customers must monitor their trading activity to stay within the 390-option order requirements. Account restrictions may occur if you are identified as a professional customer.
For more information regarding the 390 Orders Professional Customer Rule please see below: https://www.sec.gov/rules/sro/c2/2016/34-78187.pdf
CBOE: Regulatory Circular RG16-064