Exercise Limits, Reports and Liquidation

What this video covers

• How position limits differ from exercise limits, including point-in-time holdings versus aggregate long positions exercised across any five consecutive business days
• How the rolling exercise window works, why a new calendar week does not reset it, and why long calls and long puts in the same class count together
• The minimum exercise sizes for flexible exchange equity and index options, including the rule that uses the remaining position when it is smaller
• How index option exercise limits use the position limit for contracts with the nearest expiration date, and how exemptions become the new exercise limit
• When the large position report is triggered at 200 or more contracts in one class on the previous business day, including covered and uncovered short positions
• When an attempted limit violation must be reported, and when more than 10,000 non-flex equity contracts trigger a hedged position report and supporting documentation
• How the Exchange orders liquidation for excessive positions, and why the resulting trading ban covers purchasing, selling, and exercising without express approval