MEMX Sharpens Rules on Options Position and Exercise Limits
Published Date: 5/15/2025
Notice
Summary
MEMX is updating its rules about how many options contracts traders can hold and exercise, making the limits clearer and more in line with other exchanges. This change affects traders using MEMX and takes effect immediately, helping everyone understand the rules better without changing the money involved. The update aims to keep trading fair and straightforward starting right now.
Analyzed Economic Effects
5 provisions identified: 5 benefits, 0 costs, 0 mixed.
Five Position Tiers Defined
The Exchange's rules specify five position (and exercise) limit tiers of 25,000; 50,000; 75,000; 200,000; and 250,000 option contracts. To qualify for the 250,000 contract limit, the underlying security must have either at least 100 million shares traded in the most recent six months, or at least 75 million shares traded in the most recent six months and at least 300 million shares outstanding.
Rules Now List Exact Limits
If you trade options on MEMX, the Exchange added the specific position and exercise limits directly into Rules 18.7 and 18.9 so the limits are written in the rule text. The Exchange says this codification does not change the numeric limits and is intended to make the rules clearer and more uniform with other exchanges.
Exercise Limits Measured Over Five Days
The Exchange specifies that exercise limits are measured as aggregate long positions exercised within any five consecutive business days, using the same 25,000/50,000/75,000/200,000/250,000 contract tiers. The Exchange will give "reasonable notice" when it sets or changes exercise limits.
Series Positions Are Aggregated
Positions in Short Term Option Series, Monthly Options Series, and Quarterly Options Series on the same underlying security must be aggregated for purposes of the position limits. The rule text explicitly states that those series are combined when determining a customer's position.
Written Permission Can Exceed Limits
The Exchange is inserting the phrase "Except with the prior permission of an Exchange Official or his designee, to be confirmed in writing" at the start of Rules 18.7 and 18.9. This means an Options Member may exceed a position or exercise limit only with prior written permission from an Exchange Official.
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