Exchange Currency

position limits

Exchange-set limits on the total number of positions a trader or a group of traders can hold in options contracts on the same side (call or put) of the market. Their objective is to prevent the control and manipulation of the market by a few players, and limit excessive speculation that may destabilize the market. Depending on the exchange, position limits may be set as number of contracts or as total units of the commodity. In stock markets, the limit depends on the option's trading volume and the number of outstanding shares of the underlying stock. For heavily traded stocks the limit is commonly 25,000 call or put contracts, but some index options have much higher limits, and trading in less active stocks may be limited to as low as 4,500 contracts. Some commodity exchanges allow exemptions from these limits in cases of bona fide hedges and certain risk management positions to qualified traders and arbitrageurs.

Related information about position limits:
  1. Position Limit Definition | Investopedia
    Exchanges and/or regulatory bodies establish different position limits for each contract based on trading volume and underlying share quantity.
  2. U.S. CFTC boss supports appealing position-limits ruling | Reuters
    Oct 10, 2012 ... WASHINGTON/CHICAGO (Reuters) - The top U.S. futures regulator said he would support appealing a court ruling last month that struck down ...
  3. Position Limits - CFTC
    Additional information regarding Position Limits, including Bona Fide Hedging Definition & Aggregate Limits is provided below, including factsheets for each ...
  4. US court scraps CFTC position limits rule -
    Sep 29, 2012 ... A US court has rejected a proposal by the Commodity Futures Trading Commission that aimed to limit speculation in commodity markets.
  5. NYMEX Position Limits - CME Group
    An overview of position limits, levels and accountability provides links to detail rulebooks.
  6. Judge throws out CFTC's position limits rule - Chicago Tribune
    Sep 28, 2012 ... WASHINGTON (Reuters) - A U.S. judge handed an 11th-hour victory to Wall Street's biggest commodity traders on Friday, knocking back tough ...
  7. Speculative Position Limits - Futures Industry Association
    The Commodity Futures Trading Commission is currently considering whether changes are needed in the regulatory regime that governs the application of ...
  8. Dramatic Federal Court Ruling Vacates CFTC Positions Limit Rule ...
    Sep 28, 2012 ... See, Position Limits for Futures and Swaps, 76 Fed. Reg. 71,626 (Nov. 18, 2011) (“Position Limits Rule”), promulgated pursuant to the ...