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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 5, 2020

What is Position Limit?

Position limit refers to the ceiling placed on the number of contracts on a single security which may be held by an individual or cooperative group.

How Does Position Limit Work?

Determined by the Commodity Futures Trading Commission (CFTC), position limits place an upper limit on the number of contracts which an investor or combined group of investors may hold for a specific security. For instance, the CFTC may specify a position limit of no more than 15 contracts per investing party on stock XYZ.

Why Does Position Limit Matter?

By placing constraints on the number of contracts an investing party may hold, position limits ensure fairness in the options market by inhibiting any one investor's degree of control.

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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Position Limit, then please ask Paul.

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