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Position limits |
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Position limitsApplies to derivative products. Maximum position available in any one future or option contract for a given institution. For "bona fide" futures hedgers, there are no position limits.Position limits Similar MatchesMiller and Modiglianis irrelevance propositionMiller and Modiglianis irrelevance propositionTheory that if financial markets are perfect, corporate financial policy (including hedging policy) is irrelevant. Discretionary PropositionDiscretionary PropositionA proposal on a proxy card that brokers can cast in favor of management if they have not yet heard from the beneficial holder ten days before the annual meeting. See: Ten-Day Rule Synthetic positionSynthetic positionA hedging strategy combining futures and futures options for price protection and increased profit potential. For example, by buying a put option and selling (writing) a call option, a trader can construct a position that is similar to a short futures position. This position is known as a synthetic short futures position, and shows a profit if the futures prices decline, and receives margin calls if prices rise. Synthetic positions are a form of arbitrage. Synthetic forward positionSynthetic forward positionA forward position constructed through borrowing in one currency, lending in another currency, and offsetting these transactions in the spot exchange market. Long positionLong positionOwning or holding options (i.e., the number of contracts bought exceeds the number of contracts sold). For equities, a long position occurs when an individual owns securities. An owner of 1,000 shares of stock is said to be "Long the stock." Related: Short position. Further SuggestionsDisposition of Real Estate StatementPosition trader Modigliani and Miller Proposition I Clear a position Welfare proposition Covered position Position diagram Short position Take a position Position building Core propositions Heckscher-Ohlin Core Propositions long position Open position Net position Equilibrium position Net foreign asset position Long position in an option Covered position Foreign asset position Open position Position Position sheet position limit Positioning |
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