K3 for Trading

Position Limits

The Industry Standard for Position Limits

Position Limits are complicated. 

There are no shortcuts.

K3 Limits has you covered for exchange, MiFID 2, and Dodd-Frank.

  • Spread Products: Limits on spreads must be broken into the underlying legs.
  • Parent Child Relationships: Limits require child products to roll into parents at specified ratios.  This can even span time periods.
  • Simple management of hedge exemptions.
  • Spot Start Dates – legal language becomes actionable data, with actual dates.
  •  K3 leverages our cloud reference data store, Atlas, for daily updates direct from exchanges and regulators.
  • Information via customizable visualizations.

We Know Your Business

OPTION DELTAS

Did you know that all limit regimes require options to be “delta-ized.”  That means the option value is multiplied by the option delta to calculate a futures equivalent position.   

Sometimes Brokers and FCMs also calculate deltas. However, these are not the official values to use and small differences in values can have an outsized impact on positions.

K3 Limits uses the official exchange deltas published daily.

SPREAD TRADES

For most spread trades limits requires an adjustment to two different products, because the spread trade includes two opposing legs (one long and one short). For example, a Jun HH v Jun GD.   

But not all spread trades are for the same pricing period. Some products spread both products and months. 

It’s easy to miss, but just one thing that K3 handles seamlessly.

DIMINISHING PRODUCTS

Did you know that the positions for some products actually diminish during the pricing period?

Sometimes it’s straightforward and linear, and sometimes it’s not. 

In other cases, the limit itself can also deprecate as products approach spot.

 K3 handles these curveballs for you.