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What is the client wise position limit?
The client-wise position limit is the maximum number of Futures and Options (F&O) contracts you can hold on a single stock or index at any time, as set by the exchange (like NSE).- Why is it important?
- Regulatory bodies like SEBI set this limit to prevent any single client from holding too many positions, which could manipulate the market or cause systemic risk.
- When does it affect your trading?
- Your F&O order will be rejected if it makes your total open position exceed this limit, even if you have enough margin.
- This limit is specific to each stock or index and is a percentage of the total open interest or the free-float market capitalization, whichever is higher.
- It applies to your combined long and short positions.