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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 MatchesShort positionShort positionOccurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought back to close out the transaction. This technique is used when an investor believes the stock price will drop. 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. Position limitPosition limitThe maximum position, either net long or net short, in a futures market or options market that may be held or controlled by one person as prescribed by an exchange or by the CFTC. Such limits can be set for individual expiration months, such as the spot month, and for all listed expiration months combined. Since hedgers are often exempt from such limits, position limits are often termed 'speculative limits'. Heckscher-Ohlin Core PropositionsHeckscher-Ohlin Core PropositionsSee core propositions. Long positionLong positionThe purchase of a security, commodity or financial instrument (e.g. shares) in the belief that the price will increase. The purchaser hopes to sell the shares at a higher price than he bought at and thus make a profit. Further SuggestionsMiller and Modiglianis irrelevance propositionCovered position Discretionary Proposition Covered position Welfare proposition Foreign asset position Net foreign asset position Disposition of Real Estate Statement Synthetic forward position Interpositioning Positioning Open position Open position Spread position Equilibrium position Position building Clear a position Take a position Position diagram Core propositions Position sheet Net position Modigliani and Miller Proposition I Long position Position trader |
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