Is it normal that traders buy and sell options of the same stock on the same day multiple times? For example, in an event of a positive earnings release, the CALL options were bought and then sold it after an increase in a few hours. A negative news came out, bought another PUT option contract and sold it in the next hours?

  1. Are there any regulations from the SEC for such type of option trading?
  2. Is there any special license from SEC or online brokers like TDAmeritrade needed to trade options on a day to day basis?

If so inclined, it is normal for traders to buy and sell options of the same stock on the same day multiple times because after all, traders trade.

In order to trade long options you need a funded brokerage account and Level 2 option trading approval.

The only SEC restriction that might come into play is Pattern Day Trader rule which limits you to 3 day trades per rolling 5 business day period if done in a margin account. To avoid the limitation, you must have $25k in your account. There is no limit on the number of day trades that can be done in a Cash Account with settled cash.

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