position limit

Position Limit

A predetermined position level set by regulatory bodies for a specific contract or option.

Notes:

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 gauge accurately the level of control held by one party.

Each option and futures contract will have varying position limits.

See also: CFTC, Corner A Market, Futures Contract, Large Trader, Option, Position, Small Trader

---

position limit

In futures and options trading, the maximum number of contracts that an individual or a group of individuals working together may hold. The position limit is determined by the Commodity Futures Trading Commission for futures or by the exchange on which the particular contract is traded. Compare trading limit.