These limits define position quantity limitations in terms of the equivalent number of underlying shares described below which cannot be exceeded at any time on either the bullish or bearish side of the market. Account positions in excess of defined position limits may be put option premium to trade restriction or liquidation at any time without prior notification.
Background: Position limits are defined on regulatory websites and may change periodically. Some contracts also have near-term limit requirements near-term position limits are applied to the side of the market for those contracts that are in the closest expiring month issued.
Traders are responsible for monitoring their positions as well as the defined limit quantities to ensure compliance. The following examples, using the 25, option contract limit, illustrate the operation of position limits: Customer A, who is long 25, XYZ calls, may at the same time be short 25, XYZ calls, since long and short positions in the same class of options i.
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Rule 4. Customer C, who put option premium long 20, XYZ calls, may not at the same time be short more than 5, XYZ puts, since the 25, contract limit applies to the aggregate position of long calls and short puts in options covering the same underlying security.
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Similarly, if Customer C is also short 20, XYZ calls, he may not at the same time have a long position of more than 5, XYZ puts, since the 25, contract limit applies separately to the aggregation of short call and long put positions in options covering the same underlying security. New orders placed that would increase the position will be rejected.
Notes: Position limits are set on the long and short side of the market separately and not netted out. Traders can use an underlying stock position as a "hedge" if they are over the limit on the long or short side index options are reviewed on a case by case basis for purposes of determining which securities constitute a hedge. Position information is aggregated across related accounts and accounts under common control.
This includes, but is not limited to, aggregating an advisor sub-account with the advisor's account and accounts under common controljoint accounts with individual accounts for the joint parties and organization accounts where an individual is listed as an officer or trader with other accounts for that individual.
Position limit exceptions: Regulations permit clients to exceed a position limit if the positions under acquista bitcoin ora control are hedged positions as specified by the relevant exchange. For more detail about the permissible hedge exemptions refer to the rules of the self regulatory organization for the relevant product.
OCC posts position limits defined by the option exchanges.
They can be found here.