Position Limits

What this video covers

• Why the position-limit rule binds the Trading Permit Holder (TPH), not the customer, and how the firm's reason to believe affects an opening transaction
• How to combine long calls with short puts, and short calls with long puts, in separate aggregations against the same limit
• How the 25,000, 50,000, 75,000, 200,000, and 250,000 contract tiers depend on six-month volume and shares outstanding
• Why limit reductions are delayed until after the last expiration, and why increases can take effect immediately
• When separate accounts must be aggregated based on joint authority, general partnership, common management, or effective control, including ownership below 10%
• How exemptions work for box spreads, reverse conversions, over-the-counter (OTC) options, callers, reverse callers, delta-neutral hedges, market makers, and firm facilitation
• How to approach micro narrow-based index calculations and why Flexible Exchange (FLEX) options aggregate with standard equity options when the underlying is a cash-settled exchange-traded fund (ETF)