Futures 101 - Chapter 20

Chapter 19: Position Limits

Although the average trader is unlikely to ever approach them, the exchanges and the CFTC establish limits on the maximum speculative position that any one person can have at one time in any one futures contract. The purpose is to prevent one buyer or seller from being able to exert undue influence on the price in either the establishment or liquidation of posi-tions. Position limits are stated in number of contracts or total units of the commodity. The easiest way to obtain the types of infor-mation just discussed is from your broker or from the exchange where the contract is traded.