There is A LOT of misconception and misunderstanding being throw around by the folks in comments and even a good number of the bloggers, so this post is a simple explanation into the current cap situation and what the Rockets actually can or can't do.
This is the actual calculation on the Rockets salary as of today.
1. Dwight : $21,436,271
2. Harden : $14,728,844
3. Asik : $8,374,646
4. Lin : $8,374,646
5. Jones : $1,618,680
6. Dmo : $1,483,920
7. Canaan : $816,482
8. Beverley : $915,243
9. Casspi : $1,063,384
10. Covington : $816,482
11. Powell : $1,310,286
12. Garcia : $1,316,809 (cap hold $915,243 )
13. Parsons : $964,750 (cap hold $1,760,350)
14. Daniels : (cap hold $1,016,482)
15. Hamilton : $2,109,294 caphold
16. #25 pick : $991,000
Total salary and cap hold : $67,137,229
So, we are currently a bit more than 4 million over the projected cap, now remember this very important fact, any time you make a move that take a total of committed contracts under 12, you need to put in a 500,000 cap hold to that spot.
SO, with that in mind, it means that even if we cut EVERYONE except Harden and Howard, literally keeping no one on the roster and trading away our pick, we still have 500,000 x 10 + a little more than 36 M = 41 M. so yes, even in this situation we would be a little bit short of a first year Melo max (!!!!!)
So , if you think we can actually create max cap room for Melo or Lebron / Bosh (who's first year max is a bit over 20m. ) stop, reassess, and... well just stop. we can't.
Now let's look a little more closely, of the current cap holds, Hamilton and Powell we will certainly give up ASAP even if we do nothing, (well I suppose there's a marginal chance we keep Hamilton but likely not at his cap hold.) which save us $3,419,580 and we're down to 14 spots and 63,717,649 . so at this point if you move Lin and Asik your down to 12 spot and $46,968,357, so at this point you can only offer 16,031,643 in cap space. now remember, everyone you subtract after this mus still have a 500,000 caphold.
So let's suppose we dump EVERYONE except H&H and Parsons, Beverley, which seem to be dubious at best but let's see what happen. So we move Casspi / Garcia / Canaan / Covington / #25 / Daniels / Dmo / Jones for no salary back and no first round pick this year, we get a a total of $38,840,708 (cap hold for the 4 guys we have left) + 4,000,000 (500,000 x 8 ) = 42,840,708 , so we have less than 21 million in cap space, but ok I suppose it is theoretically possible that Melo take a mini paycut like this.
But I think it is understood that to blow up a team down to having just 4 guys on the roster is both difficult and unpractical. you still need depth on any team as this year's finals should reveal quite clearly, and you need to hope Morey can find 3 more Pat Beverley for nothing again in an off season? I doubt it.
The Chandler Parsons situation
As you can see, Parson's cap hold is higher than his option, meaning that if we don't exercise his option it actually hurts our cap by about 1 million, not only that, it also makes him much more difficult to move in any potential trade or S&T, why? because there are 3 limitations to RFA in trade.
1. RFA that have signed a offer sheet can not be moved in a package (meaning you can trade Parsons for player X + Y, but not Parsons + Lin for Player X + Y.)
2. RFA that resigns with his old team can not be traded for a certain period (meaning you can not get around #1 by resigning Parsons yourself first.)
3. You can NOT do a RFA S&T deal with your offer being that you don't match a offer sheet, meaning that if say, the Cavs with their big cap space make a offer sheet to Parsons, then the Rockets CAN NOT do a S&T with the Cavs for Parsons at all, they have to either match or let him go.
So under these situation, this means that
A. If you move Parsons for Love, it has to be strait up Parsons for Love, which obviously isn't a great package.
B. You can NOT , move Parsons to New York at all no matter what, because NY is so far over the cap they can not even offer Parsons an offer sheet anyway.
C. You could theoretically move Parsons to Miami in a S&T, but it would require them renounce Bosh's cap hold first, which means they can't S&T Bosh . so essentially for them it's LBJ + Bosh strait up for Parsons ... ummm... yeah.
Given all this, it seems quiet obvious that if your really using Parsons as trade bait, you should exercise the option, teams like NY / MIA can keep Parsons long term anyway even if he's UFA. by not exercising the option (we'll know for sure in a couple days.) it means almost certainly that the Rockets are resigning him no matter what, because regardless of what happens in FA ( I personally think nothing will happen, we're not getting those guys.) we're out of cap space, and Parson's current cap hold is minuscule. Thus your not choosing between Parsons or a Deng / Hayward, your choosing between Parsons or replacing him with Hamilton or some other minimum wage wings. given that, it seems that even if someone max him out we have to match.
So to sum up:
1. no, we can't clear anything close to max cap space for those players, if those deals were to happen it has to be a S&T of some sort.
2. Parson's staying the moment they confirm that he's a RFA.