Tradovate Futures Trading Blog

What is the One Contract Position Limit and Why Does It Matter?

Written by Tradovate | February 22, 2017 at 10:03 PM

Tradovate’s Essential membership plan allows you to trade with a one contract position open

at any given time (one contract position limit). You can trade any contract on any exchange that you want and for an unlimited amount of trades.

 

For example, you could buy one CME e-mini S&P 500 contract to open and sell one contract to close that position, and then buy and sell one contract again. You can buy and sell two times or 200 times, as much as your account balance will accommodate. On Tradovate, there is no restriction on the number of trades or contract volume you can transact per day, per month, or per year. However, if you wanted to buy two e-mini S&P 500 contracts or buy 1 one e-mini S&P and one NYMEX crude oil at the same time, you would need to upgrade to the Active or Advanced membership plan to trade with no contract position limit.

 

Why is the Position Limit Important?

 

Many traders who start off trading one contract per trade in order to get the swing of things like to add more contracts once they are more comfortable trading futures. They may want to increase their position size if they see a great trading opportunity that calls for taking on more risk, or want to add more contracts to improve their average position price. Other traders start off trading a single market, like the e-mini S&P 500, to establish themselves and then add other markets, like gold and currencies, to diversify their strategies. Other traders like to mix contracts when volatility ebbs in one market but is flowing in another.

 

Opportunity comes in different sizes and Tradovate has different membership plans to fit just the right size for you.