Settings: Max Position settings are applied to each market individually. Outright markets use the number placed in the Outrights section, while spreads use the number placed in the Strategies section. The Account section is not used in this mode, so there is no limit on the total position in this mode.

Explanation: A market is any unique exchange-listed expiration or spread. For example, within Silver Futures, the Dec is a separate market from the Jan, and they’re both separate from the Dec-Jan spread. Similarly, options have unique markets for every put and call, strike by strike, as well as spreads. Furthermore, spreads traded in this account mode are not broken into their constituent legs, which means that a spread position that was entered via the spread and flattened via the legs will appear as separate line items that do not offset. This allows an account with a Max Position of 1 for Outrights and 1 for Strategies to buy 1 future in every expiration, buy 1 call in every strike of every expiration, sell 1 put in every strike of every expiration, and add on 1 of every possible spread in such a way that compounds the outright positions.

Settings: Max Position settings are applied to each contract individually. Long and short positions contribute to a single limit, so a limit of 10 will allow for +7 Dec and -3 Jan. All positions use the numbers placed in the Outrights and Strategies sections in tandem since all spreads are broken into their constituent legs. The Account section places a limit on the total position across all contracts.

Explanation: A contract is a family of markets. For example, Silver Futures (SI) would be a contract consisting of every outright silver future and every silver future spread. Silver Options (SO) would be a separate contract with separate limits. Note that any option group with a different contract code will have separate limits, so Silver Week 1 Options (SO1), Week 2 (SO2), etc. will all have separate limits. This means an account with a Max Position of 1 for Outrights can buy 1 SI Future, buy 1 SO option, buy 1 SO1 option, etc. without violating the position limit. The values for Outrights and Strategies are used in tandem in this mode because all strategies are broken into their constituent legs. This means that an account with an Outright limit of 10 and a Strategies limit of 20 will only be able to do 5 Dec-Jan spreads, not 20, because the 5 Dec outrights plus the 5 Jan outrights puts the account at the Outright limit of 10. If that same account had an Account setting of 50, then the position of 5 Dec-Jan spreads could only be done in 5 different contracts (i.e. Silver, Gold, Crude, Nat Gas, and RBOB) before no more positions could be added anywhere.

Settings: Max Position settings are applied to the account as a whole. Long and short positions contribute to separate limits, so a limit of 10 will allow for +10 Dec, -3 Jan, and -7 Feb. All positions use the numbers placed in the Outrights and Strategies sections in tandem since all spreads are broken into their constituent legs. The Account section places a limit on the total position across all contracts.

Explanation: The values for Outrights and Strategies are used in tandem in this mode because all strategies are broken into their constituent legs. This means that an account with an Outright limit of 10 and a Strategies limit of 20 will only be able to do 10 Dec-Jan spreads, not 20, because the 10 Dec long outrights hit the long Outright limit of 10, while the short 10 Jan outrights hit the short Outright limit of 10. If that same account had an Account setting of 50, then the position of 5 Dec-Jan spreads could only be done in 5 different contracts (i.e. Silver, Gold, Crude, Nat Gas, and RBOB) before no more positions could be added anywhere.

Settings: Identical to byAccount Mode except that only current day positions are considered. Any positions from previous trading sessions are ignored.

Explanation: This mode allows for daily position limits but it does not limit how large the position can become over time. If an account starts with no position and has a limit of 10, then the account can buy 10 in one market and sell 10 in any other market. The next day, since those positions are ignored, the account can buy 10 more in the first market and sell 10 more in the second market.

Settings: Identical to byAccount Mode.

Explanation: The purpose of byPortfolio Mode is to create an accurate, real-time, SPAN-like margin number for the account. This typically makes position limits obsolete, but they can still be added here if necessary. For example, a position limit of 100 for options would look at 100 0.01 delta options the same as 100 1.00 delta options, while the risk in terms of equivalent futures is 1 future vs 100 futures. With byPortfolio mode, a delta limit can be set that only allows, say, the equivalent of 10 futures of exposure. In this case, 1,000 0.01 delta options would look the same as 10 1.00 delta options, since they both result in 10 futures' worth of delta exposure.