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 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 NBA salary cap is the maximum amount of money that the NBA teams can spend on player salaries. All the terms and conditions of the control costs are determined by the Collective bargaining agreement (CBA). The salary cap for the 2024-25 NBA season is set at $140.58 million with the tax level set at $170.81, as per the NBA's official website. This cap is computed as a percentage of the league's revenue from the prior season and is governed by a complicated set of guidelines and exceptions.
Role of Salary Cap in Trades
As per 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 cap space the team had plus $100,000, it is possible for a team that is below the salary cap to 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
Some NBA Trade rules in the 2024-2025 season as per Sports Net are as follows:
Second Apron Teams: Boston Celtics, Phoenix Suns, Milwaukee Bucks, and Minnesota Timberwolves, these teams face strict trade limitations, they cannot combine multiple player salaries in a deal, and must ensure that any incoming salary does not exceed what they are sending out.
First Apron Teams: Boston Celtics, Phoenix Suns, Cleveland Cavaliers, Denver Nuggets, Orlando Magic, New York Knicks, these teams have slightly more flexibility and are allowed to receive up to 110% of the salary they trade away
Threshold Team: Golden State Warriors and Mavericks, these teams are just below the apron but could trigger apron-level restrictions if they take on too much additional salary in a trade.
Above-Cap, Below-Apron Teams: Hawks, Nets, Hornets, Bulls, Cavaliers, Rockets, Pacers, Clippers, Grizzlies, Pelicans, Thunder, Magic, Blazers, Kings, Spurs, Raptors, Jazz, and Wizards, these teams follow the traditional rules, with some added flexibility.
Below-Cap Team: The Detroit Pistons has the most flexibility and can absorb contracts freely until they reach the salary cap, after which they would need to follow the appropriate trade rules.
Toronto Raptors: This team is above the salary cap but below the first apron as of March 2025, the Raptors have significant space to take on additional salary in trades.
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 Transaction 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?
The NBA trade deadline for the 2024-25 NBA season was February 6, 2025, at 3 p.m. ET.
Shocking Trades in NBA history
According to the official website of the NBA, ESPN, and Fox Sports, some shocking trades in the NBA history are as follows:
- Anthony Davis, from the Los Angeles Lakers to Dallas Mavericks and Luka Doncic from Mavericks to Lakers in 2024-25.
- Kevin Durant from Brooklyn Nets to Phoenix Suns in exchange for Mikal Bridges, Cam Johnson, Jae Crowder, four unprotected future first-round picks and a first-round pick swap in 2022-23
- Kyrie Irving from Nets to Mavericks in exchange for Spencer Dinwiddie, Dorian Finney-Smith, a first-round pick and a pair of second-round picks in 2022-23
- James Harden from Nets to Philadelphia 76ers in exchange for Ben Simmons, Seth Curry, Andre Drummond and two first-round picks in 2021-22
- Nikola Vucevic from Orlando Magic to Chicago Bulls in 2020-21
- Shaquille O'Neal from Lakers to Miami Heat in 2004
- Kevin Garnett from Minnesota Timberwolves to Boston Celtics in 2007
- Wilt Chamberlain from San Francisco Warriors to Philadelphia 76ers in 1965
- Chris Webber traded from Washington Bullets / Wizards to the Sacramento Kings for Mitch Richmond and Otis Thorpe in 1998
- Paul George from the Oklahoma City Thunder to the Los Angeles Clippers in 2019
- Moses Malone from the Houston Rockets to the Philadelphia 76ers in 1982
- Chris Paul from the New Orleans Hornets to the Los Angeles Clippers in 2011
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 March 2025, Adam Silver is the commissioner of the NBA.
