TT uses the following formula to calculate an account’s position, specifically an account's position when determining if an order should be allowed to enter the market.

Current Position + Working Orders on Buy/Sell side + Possible Fill from Current Order = **Worst Case Position**

An account’s worst case (long or short) position is compared against the account's Maximum Position limits. Long (Buy) positions are considered positive and short (Sell) positions are considered negative.

Example | Worst Case Position |
---|---|

Long Side Example: Position is Long 5 in account ABC (which does not belong to an account group). Working Buys for a total of 4 contracts in account ABC. Working Sells for a total of 3 contracts in account ABC. Trader enters an order to |
What is the account’s worst case long position? Current Position [+5]+ Working Orders [+4]+ Possible Fill from current order [+7] = Worst Case Position [+16] |

Short Side Example: Position is Long 5 in account ABC (which does not belong to an account group). Working Buys for a total of 4 contracts in account ABC. Working Sells for a total of 3 contracts in account ABC. Trader enters an order to | What is the account’s worst case short position? Current Position [+ 5]+ Working Orders [-3]+ Possible Fill from current order [-7] = Worst Case Position [-5] |

When an order is submitted, the following account position limits are considered:

- Can the account be used to trade the product or contract in question?
- Is trading allowed for this contract? (If there is a contract setting for the contract being traded, is trading allowed? If there is not a contract setting, is trading allowed for the product?)
- Is the order quantity less than or equal to the account’s maximum order quantity limit set for the product (or contract if set)?
- Is the WCP less than the account’s maximum position limit?

If these tests pass, the approved order is sent to the market.

Account ABC has a maximum product position of 5 configured for ES. Trader_1 buys 4 ES contracts using account ABC. Trader_2 attempts to buy 2 ES contracts using account ABC. He is rejected because the Worst Case Net Product position for ES would be 6, and the account limit is 5.

A max position limit of 5 ES contracts is configured for account ABC. A trader buys 3 ES contracts using account ABC. No other trader can place a buy order for more than 2 ES contracts in account ABC.

Account A is created. Accounts 1, 2, and 3 are created as child accounts of Account A. A max position limit of 5 ES contracts is configured for account A. Limits are not configured for Accounts 1, 2, and 3. One ES contract is bought in each account. The ES position of account A is now 3. If a user tries to buy more than 2 ES contracts in accounts 1, 2, or 3, then the order will be rejected because they would exceed the limit of Account A.

A trader uses account ABC and has the following risk limits:

- Product is ES
- Max Order Size is 5
- Max Position is 10
- Current Position is 0. No working orders

**Question:** Can the trader buy a 3-lot?

**Answer: **

- Is Order Size < Max Order Size?

(Is 3 less than 5? - Yes) - Current Position + Working Buys + Possible Fill = Worst Case Position

(0 + 0 + long 3 = long 3) - Is Worst Case Position less than or equal to Max Position Limit?

(3 < 10)

**Result:** Order is accepted.

A trader uses account ABC, which is a child of Account 123. Account 123 has the following risk limits:

- Product is ES
- Max Order Size is 5
- Max Position is 10
- Account ABC has a current position of long 1.
- Account XYZ, which is also a child of Account 123 has a current position of long 8.

**Question:** Can the trader buy a 3-lot?

**Answer:**

- Is Order Size < Max Order Size?

(Is 3 less than 5? - Yes) - Current Position (cumulative position for Account 123 and all of its children )+ Working Buys + Possible Fill = Worst Case Position

(log 9 + 0 + long 3 = long 12) - Is Worst Case Position less than or equal to Max Position Limit?

(12 > 10)

**Result:** Order is rejected