A trade in the National Basketball Association (NBA) is a deal in which players are transferred from one basketball franchise to another. Even though players are the main trade assets, trades may also include or even be purely based on draft picks, cash, or other items. The move might either involve trading players along with draft picks, cash, or both, or just draft picks.
In the NBA, a sign-and-trade agreement is a transaction permitted under the league's collective bargaining rules. In this process, a team signs a free agent, whether restricted or unrestricted, to a new contract and then immediately trades them to another franchise chosen by the player.
How does trade work in the NBA?
According to the official website of the NBA, the trades happen in the following ways:
- Salary Cap Calculations
- Exchange of Medical Information
- Exchange of Insurance Information
- Bonus-Assumption Decisions
- No-Trade Clauses / Trade-Bonus Reductions
- Draft Considerations
- Sign-and-Trade / Extend-and-Trade Deals
- The Trade Call
- Reporting and Physicals
What is a Salary Cap?
The salary cap for the NBA 2025-26 season will be $154.647 million, which is 10% more than the salary cap of the previous year. The Luxury Tax threshold will be $187.895 million, $37 million higher than the current season, due to new media deals being signed. The First Apron will be $195.945 million, and the Second Apron will be $207.824 million, meaning that the team's freedom to operate will be more limited as a result of the new CBA rules.
Role of Salary Cap in Trades
As per the NBA's CBA rules, teams below the salary cap are allowed to trade irrespective of salaries as long as they are not $100,000 above the salary cap post the trade. Similarly, if a team is over the salary cap, they are not allowed to trade for any player whose salary is more than 125% of the salary of the player they are sending to the other team.
What are NBA Trade Rules?
Whether a team is below the salary cap, a non-tax-paying franchise, or a taxpaying team affects the NBA trade regulations for that team. If the combined wages of the incoming player(s) do not exceed the team's cap space plus $100,000, a team below the salary cap can make a deal. The combined salary of the entering player(s) in a trade for a taxpaying team cannot be more than 125% of the salaries of the exiting player(s) plus $100,000. Additionally, teams can add players through several exceptions that let them spend more than the salary cap. The combined wages of the incoming player(s) in a trade for a non-tax-paying team (over the salary cap but below the luxury tax threshold) should not exceed the greater of the following two figures:
• The lesser of (A) 175% of the exiting player(s)' salary plus $100,000 or (B) the outgoing player(s)' salaries plus $5 million
• 125% of the exiting player(s)' wages plus $100,000
CAP & APRON RULES/SUMMARY
UNDER THE CAP
- No trade restrictions
- No buyout restrictions
- Must spend to the salary floor by the start of the season, or the team will have a cap hold assigned for the difference
OVER THE CAP
- No trade restrictions
- No buyout restrictions
OVER THE FIRST APRON
- Using more than Tax MLE out of NTMLE
- Using BAE
- Acquiring a player via Sign-and-Trade
- Signing a buyout player who made more than NTMLE on the previous contract
- Using more than 100% in salary matching in a trade
- Using a TPE that was created in the prior season
Teams: Boston Celtics, Golden State Warriors, Dallas Mavericks, New York Knicks, Minnesota Timberwolves
OVER THE SECOND APRON
- Using Tax MLE
- Aggregating two or more player salaries in a trade
- Sending out cash in trade
- Acquiring a player using a TPE that was created via pervious sign-and-trade
- Re-sign own free agents
- Sign draft picks
- Sign players to minimum contracts
- Make trades where one player salary is sent out and equal or less salary comes back (can do a 1 for 2+ trade)
Teams: Cleveland Cavaliers
Different Types of Trades and Transactions in the NBA
Pre-Arranged Trades
Any number of teams with enough cap space to immediately fill all positions on both rosters may participate in this deal. Every year, between June 30 and July 15, this type of deal must take place. Additionally, players who were just drafted by the team they are being traded from cannot be included in these trades.
After the season Trade Deadline
Teams can make trades after the regular season is done to fill needs they weren't able to meet during the regular season. NBA teams find it easier to re-sign their free agents at this point.
Simultaneous Trade
When two clubs with identical contracts consent to do the deal at a time of their choosing, it is referred to as a simultaneous trade. They must give 24 hours' notice to the owners of the respective teams as well as the players in the deals.
Types of Transactions in the NBA
As per NBA official website, there are four types of transactions in the NBA:
- Free-Agent signings
- Trade transaction
- Waive Transaction
- Claimed Off Waivers
NBA Trade Deadline
The last day of the season when players can be traded from one team to another is the Trade Deadline. The NBA trade deadline will always be exactly 10 days before the All-Star Game as per the Collective Bargaining Agreement of 2017, guaranteeing that the date will be a Thursday.
When is the NBA Trade Deadline in 2025/26?
The NBA trade deadline for the 2025-26 NBA season is February 6, 2026, at 3 p.m. ET.
Shocking Trades in NBA history
Some shocking trades in NBA history are as follows:
- Luka Dončić to the Los Angeles Lakers (2025), Anthony Davis went to the Dallas Mavericks
- Wilt Chamberlain to the Philadelphia 76ers (1965)
- Kevin Garnett to Boston Celtics (2007)- The Celtics traded a package that included five players, with the main focus being on the young centre Al Jefferson, as well as two first-round picks, in exchange for Garnett, thus recording the biggest transaction for one player ever in NBA history.
- Shaquille O'Neal to Miami Heat (2004)- Lakers received Caron Butler, Lamar Odom, Brian Grant and a first-round pick.
- Kobe Bryant to the LA Lakers (1996)- Hornets received Vlade Divac
FAQs on NBA
A. The head quarter of the NBA is 645 Fifth Avenue, in New York, New York, U.S.
A. The Los Angeles Lakers did not make any trades during the 2025 NBA trade deadline.
A. The first NBA season started in 1946–47.
A. As of December 2025, Adam Silver is the commissioner of the NBA.
