NBA Sign-and-Trade: What It Is and How It Works

In our Complete Guide to the NBA Market, we discussed the topic of Sign-and-Trade, which we will explore in detail in this article.

What is Sign-and-Trade?

Sign-and-Trade is a market tactic used to “navigate” the restrictions of the Salary Cap, where a player is signed and then traded shortly after.

In the context of NBA Trades, this is a legal and fully allowed practice aimed at providing flexibility in trade movements between teams. This arrangement benefits both the team and the player, unlike the Buyout process.

How does Sign-and-Trade work?

A player who has become a Free Agent can choose to sign immediately with a team (Sign) and then be traded shortly afterward (Trade).

In this case, the player will be able to sign a lucrative contract and maximize their earnings, while the team can free up salary space equal to the player’s contract value.

However, there are some limits to respect:

• The player must execute the Sign-and-Trade with the team they played for the previous season and no one else.
• The new season must not have started.
• The player must have completed the previous season with the same team they are agreeing to the S&T with.
• The player must receive a contract of at least three or four years, with the first year fully guaranteed.
• The team receiving the player must not exceed the Luxury Tax limits after the trade.

When all these restrictions are respected, the Sign-and-Trade can be carried out, ensuring the benefits for both parties.