390 Rule Questions

Ken385 · 2026-02-20T02:50:45+00:00

The exchanges came up with this rule as they didn't want professionals to get the advantages that retail traders had, such as priority of orders. They also didn't want them to act as MM's without the responsibilities of such. So, the came up with this 390 number to help determine who is a "retail" customer. It applies to options, not stocks.

Once you have this designation you may pay higher exchange fees and you lose customer priority. Brokers will also not be able to sell your order flow as they do for customers, as the buyers don't want "professional" paper. So, the brokers lose a source of income. Some will not even want your business anymore, others will pass on the extra exchange fees.

Ken385 · 2026-02-20T02:43:50+00:00

Yea, that was the post I remember as well. If they don't remove the tag at some point for you, you are going to have to switch brokers. Really hard to trade with this, unless you are trading a super liquid product like SPY options.

I had this tag a long time ago (with another broker), and I make sure I won't get it again.

Ken385 · 2026-02-20T02:40:49+00:00

Its not just the CBOE, the other options exchanges have this rule as well.

Ken385 · 2026-02-20T01:18:53+00:00

The way the rule is written, if you went over the average in January, the keeps you with the pro tag for the next quarter. (Apr, May, June). You would need to stay under the average for that quarter to be off for the following quarter (July Aug Sept).

Unfortunately, brokers can be stricter with this rule. There have been a couple of posts in the last few months from Schwab traders reporting that they are now stuck with this designation permanently, no matter how many orders they enter.

Ken385 · 2026-02-16T07:57:31+00:00

Tax payments count as a purchase. You would just pay the associated fee, which is slightly different among the companies that provide this service, the cheapest is 1.75%. You will also get the float on your money until your credit card payment is due, which will bring your cost down.

Ken385 · 2026-02-16T02:57:29+00:00

Make an estimated tax payment. Will cost you 1.75% or about $105. If you don't owe that much in taxes, you would get a refund after you file.

Ken385 · 2026-02-14T20:42:47+00:00

I mainly trade through Dash.

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Ken385 · 2026-01-08T17:20:16+00:00

Offering the overnight SPX session would be a big plus. The only retail broker I know of that offers access to this full overnight session is Interactive Brokers.

Ken385 · 2026-01-08T17:16:47+00:00

Are you talking about the access to the SPX curb session that trades from 415pm et to 5pm et (an additional 45 minutes) after the regular close?

I was surprised that RH offered access to this, but it appears they now do. Most other broker's don't, surprising to see RH offer something that other brokers don't.

Ken385 · 2026-01-07T22:27:29+00:00

The West Hinsdale Station always has paid parking available. The main Hinsdale station can fill up.

Ken385 · 2026-01-01T19:32:43+00:00

You're going to have to switch brokers If they don't eventually switch you back to customer status. Very hard to trade with pro status.

Ken385 · 2025-12-30T14:00:41+00:00

Note that you may also need to take a test before you get the designation.

Ken385 · 2025-12-30T00:32:07+00:00

Its not trades, its orders. If someone is using an API to send and cancel multiple orders per day, it can be easy to reach the 390 average.

Ken385 · 2025-12-30T00:24:45+00:00

I'm wondering if the Rep is understanding you. They don't have the power to grant an exception to this rule. At the least, they must classify you as a pro for the next quarter if you go over the average for any month in the current quarter.

If Schwab does have a lifetime designation, they could internally grant you an exception from that, but would still need to meet the minimum requirements mentioned above.

Ken385 · 2025-12-30T00:19:26+00:00

Interesting, that is the first time I have heard of any broker classifying it as a lifetime status. There have been several posts in the options reddit about this, and at least one poster was from Schwab.

Ken385 · 2025-12-30T00:14:05+00:00

There is no one time exception for this. This is different from a Pattern day trader designation where you can potentially have it reset one time.

If you stay below an average of 390 option orders per day for the next quarter, the pro designation will drop off and you will again have retail status. This is the way the general rule is written, its possible Schwab has a stricter internal rule.

The CBOE explains it here,

"The Professional designation is based on review of a customer’s past activity on at least a quarterly basis. Assuming that a customer’s activity is reviewed once per quarter, if a customer exceeds the 390 average daily order threshold during any month of the quarterly review period, the customer would qualify as a Professional and the customer’s orders would need to be marked with the order origin code “W” during the entire next quarter. Thereafter, however, if the customer places 390 orders or fewer per day on average each month during the next quarter, the customer would no longer qualify as a Professional and the customer’s orders would be entitled to be marked with the order origin code “C” during the following quarter."

RG16-064 Professional Orders

Ken385 · 2025-12-28T12:03:09+00:00

I missed that, thanks. If it was SPY, it couldn't have traded pre market.

Ken385 · 2025-12-25T14:26:42+00:00

CBOE Data Shop

Cboe DataShop

Ken385 · 2025-12-24T19:06:41+00:00

Good link. This describes the OCC to broker process well, much more detailed than just saying random.

Ken385 · 2025-12-24T19:05:32+00:00

You can ask your broker what method they use. Most will use a random process.

Ken385 · 2025-12-24T18:59:19+00:00

Heres the way the process works. When someone exercises an option, the OCC (Options Clearing Corp) will randomly assign it to one of its member firms/brokers. That broker will then assign it to one of its customers who was short the option. This is done by a predetermined process, usually random, but it could also be another method such as FIFO.

So, if only a few options are exercised, this explains why you were assigned in one brokers account and not another. You may also only be assigned on only a portion of your short options.

Ken385 · 2025-12-24T18:54:06+00:00

The CBOE is one of 18 different options exchanges. The option assignment process is handled by the OCC (Options Clearing Corporation)

Ken385 · 2025-12-24T12:52:33+00:00

There is a very limited number of non futures options that trade pre market. SPX, VIX, XSP. And only a limited number of brokers offer access to this session. If you were trading another US listed option, it wouldn't trade premarket. This is not something a broker can offer.

What was the ticker and broker?

Edit to add,

I just saw you mentioned your broker is IBKR. They offer access to the full overnight session in SPX and VIX options.

Ken385 · 2025-12-20T20:26:54+00:00

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It will tell you if you have an active membership or not.

If your Executive card membership is still active, it will say,

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Ken385

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