e position limit refers to the maximum number of contracts that can be held by a trader in futures.
e purpose of position limits is to prevent speculators from exercising any inuence on the market or
to prevent any particular trader from cornering the market. For example, the position limit for a cashew
contract in the NCDEX is stated as:
“200,000 cartons for all contracts for members and 50,000 cartons for all contracts for clients. e
above limits will not apply to bona de hedgers. For bona de hedgers, the Exchange will, on a case-to-
case basis, decide the hedge limits. For near-month contracts ...
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