Position Limits Netting
A large part of the complexity in position limits is related to the netting methodologies applied to individual contracts.
The type of netting used is dictated on a contract basis by the exchange.
This is then applied to split a position out into one or more results which are displayed in the dashboard.
The current set of netting methods with a brief description is provided below.
(Note that there can be a further separation by Physically or Cash settled positions which is not shown here for conciseness)
Netting Method | Definition | |
Gross | The Gross sum of all positions present (Gross Long and Gross Short) | |
Gross Long (Call) | Individual break outs of Option positions when these must be reported independently and not netted against each other (Options per Quadrant) | |
Gross Long | Used when only the Gross Long or Gross Short positions are to be reported | |
Net Long / Short | The Net sum of all positions | |
Net Long (Full & Mini-sized) | The Net Long or Net Short positions taking into account both full contracts and their equivalent mini contracts. This is used when the netting for the contract is defined as combined but not offsetting | |
Net Long / Short (Futures) | Equivalent to Net Long / Short but with additional restrictions placed on which positions to include | |
Gross Long (Per Client)
Gross Short (Per Client) | Equivalent to Gross Long | Gross Short but with additional restrictions placed on which positions to include | |
Gross (Per Client - 60% of Limit) | Equivalent to Gross but with additional restrictions placed on which positions to include or on what construes a breach of the limit |