Position Limit

The highest number of options or futures contracts an investor is allowed to hold on one underlying security. Exchanges and/or regulatory bodies establish different position limits for each contract based on trading volume and underlying share quantity. The Chicago Board Options Exchange is one entity that calculates position limits for options exchanges.

Position limits are created for the purpose of maintaining stable and fair markets. Contracts held by one individual investor with different brokers may be combined in order to accurately gauge the level of control held by one party.

Wall Street reform regulations enacted in the aftermath of the financial crisis of 2008 required the Commodity Futures Trading Commission to establish position limits for commodity futures and swaps.

Investment dictionary. . 2012.

Look at other dictionaries:

  • position limit — The maximum number of speculative futures contracts one can hold as determined by the Commodity Futures Trading Commission and/or the exchange upon which the contract is traded. Also referred to as trading limit. Chicago Board of Trade glossary… …   Financial and business terms

  • position limit — 1) A limit placed by a financial exchange on the exposure that any single transactor may undertake. 2) An internal risk management limit imposed on positions to be held by traders, desks, etc. within an organization. See also intraday limit;… …   Big dictionary of business and management

  • position limit — Fin the largest amount of a security that any group or individual may own …   The ultimate business dictionary

  • Position limit checking —   Position limit checking is a part of the fiat module, checks whether the postings that have been generated cause limits to be exceeded. The automatic fiat process rejects all requests that result in the exceeding of any position of either the… …   International financial encyclopaedia

  • limit — See price limit, position limit, and variable limit. The CENTER ONLINE Futures Glossary See trading limit. Bloomberg Financial Dictionary A contract s maximum price advance or decline from the previous day s settlement price permitted in one… …   Financial and business terms

  • Limit Order — An order placed with a brokerage to buy or sell a set number of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before being canceled. Depending on the direction… …   Investment dictionary

  • Limit (Roman) — Limit ist ein Roman des deutschen Schriftstellers Frank Schätzing, der Anfang Oktober 2009 im Verlag Kiepenheuer Witsch erschien. Zentrales Thema des Thrillers ist der Abbau des Heliumisotops Helium 3 auf dem Mond, welches zur Energiegewinnung… …   Deutsch Wikipedia

  • Position (poker) — Position in poker refers to the order in which players are seated around the table and the related poker strategy implications. Players who act first are in early position ; players who act later are in late position . A player has position on… …   Wikipedia

  • Limit of a function — x 1 0.841471 0.1 0.998334 0.01 0.999983 Although the function (sin x)/x is not defined at zero, as x becomes closer and closer to zero, (sin x)/x becomes arbitrarily close to 1. It is said that the limit of (sin x)/x as x approache …   Wikipedia

  • Limit (Poker) — Dieser Artikel oder Abschnitt ist nicht hinreichend mit Belegen (Literatur, Webseiten oder Einzelnachweisen) versehen. Die fraglichen Angaben werden daher möglicherweise demnächst gelöscht. Hilf Wikipedia, indem du die Angaben recherchierst und… …   Deutsch Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.