NBA trade rules are built around a simple principle: outgoing and incoming salaries must roughly match. But the actual math depends on the team’s cap status, and a long list of side rules — Stepien rule, hard-cap triggers, trade exceptions, base year compensation — can break a deal that seems straightforward. Here’s the framework.
The basic salary-matching rule
For most teams (those over the cap but below the first apron), the rule is: incoming salary cannot exceed 200% of outgoing salary plus $250,000, up to certain thresholds. Above the first apron, the tolerance shrinks to 110%, and there is no scaling.
In plain terms: a team trading away $10M in salary can usually take back up to $20M. A team above the first apron can only take back $11M. And a team above the second apron has the strictest rule of all — no salary aggregation across multiple players in the same deal.
What you can — and can’t — trade
- Players: Yes, with their full contract going to the receiving team.
- Future draft picks: Up to seven years out, but constrained by the Stepien rule (see below).
- Pick swaps: A right to swap positions with another team’s pick in a given draft.
- Cash: Up to a season cap (currently around $7.5M) — but teams above the second apron cannot include cash at all.
- Trade exceptions (TPE): Slot a team can use to absorb salary without sending matching salary back, valid for one year from creation.
The Stepien rule
Named after former Cleveland Cavaliers owner Ted Stepien (whose 1980-82 trade history was so disastrous the league created a rule to prevent its repeat), the Stepien rule prohibits a team from trading future first-round picks in two consecutive years. In practice, this means a team can trade picks in 2026 and 2028 (skipping 2027), but not in 2026 and 2027.
This is why trade analysts often refer to a team being « out of pick capital » — they’ve already used the available windows under the Stepien rule and physically cannot include another first.
Hard-cap triggers
Several trade actions instantly hard-cap a team for the rest of the season:
- Receiving a player via sign-and-trade.
- Using the bi-annual exception (BAE).
- Using the full mid-level exception (MLE) above the first apron.
- Acquiring a player off waivers when above the cap.
Once hard-capped, the team cannot exceed the first apron under any circumstances — every subsequent move must be checked against that ceiling.
Trade Player Exception (TPE)
A TPE is created when a team trades away a player without taking equivalent salary back in the same deal. The team gets a « credit » equal to the outgoing salary, valid for one calendar year, that it can use to absorb a player in a future trade without matching salary.
TPEs cannot be combined and cannot be split across multiple players. Above the second apron, teams cannot use TPEs at all.
Other rules to know
- Trade deadline: First Thursday of February. After this date, no trades for the rest of the season; only buyouts and 10-day contracts.
- Bird rights transfer: A traded player’s Bird rights transfer to the new team, but the years of service clock continues.
- No-trade clause: Available only to a small set of veterans (10+ years of service, 8+ with current team, before signing). LeBron James and a handful of others currently hold one.
- 60-day re-acquisition rule: A team that trades away a player cannot reacquire them for 60 days (originally 30 days; extended in 2017).
- Base Year Compensation (BYC): Now removed. Was a complex rule about how recently signed players counted in trade math; deprecated in 2017.
Frequently asked questions
Why do trades sometimes get held up?
The league reviews every trade for cap compliance and physical examinations of incoming players. If a player fails a physical, the deal can be voided or restructured (like the famous Tyson Chandler-OKC trade in 2010).
Can teams trade newly signed players?
Yes, but with restrictions. Free agents who re-sign with their team in the offseason cannot be traded for three months or until December 15, whichever comes later. Newly signed UFAs who switched teams cannot be traded for three months.
What’s a sign-and-trade?
A team signs its own free agent (using Bird rights for a longer/higher contract than the new team could offer directly) and immediately trades them. Beneficial for the player (more guaranteed money) and creates a TPE for the trading team. Hard-caps the receiving team.
Related articles
Sources: NBA 2023 CBA, Spotrac CBA Reference, Larry Coon’s CBA FAQ.