Restriction Rules

Each rule presents metrics and settings used to define the threshold that will trigger action on an order. You can specify whether rules will "Restrict" or "Allow" trading, and whether "Any" or "All" rules must be met to trigger a restriction. The associated time in force specifies how long the rule will remain active. Add rules in the second step of creating a restriction. You can add the following rules to a restriction:

Minimum Holding Period (Special Restriction)

The Holding Period rule will prevent users from placing CLOSING ORDERS earlier than dictated by the applied Minimum Holding Period restriction. The holding period is defined by a specific number of calendar days from the trading day, and may also specify the type of position (long, short, or all) and the entity to restrict (Underlying or Issuer).

Note that while other restrictions allow you to choose from nine or more available rules and to apply them to either restrict trading or notify only, the special Minimum Holding Period rule only allows the Holding Period rule to be applied, and it always restricts trading.

Net Margin

Choose to set a threshold for Excess Liquidity or Margin (via the Margin Cushion metric). This rule will be met if an order would cause the selected metric to fall below the specified threshold.

Net Portfolio

Enter a net amount or percentage limit that will be assessed against all long or all short positions. This rule will be met if an order would cause the net Long (or Short) positions to exceed the specified amount/percent threshold.

Liquidation/Closing Only

Restricts trades to either liquidating or position-closing trades only. This rule will be met if an order would result in establishing a new or increasing an existing position.

Issuer of Symbol

This rule will be met if an order on the specified issuer is submitted on the selected order side (Buy, Sell, Sell Short or All).

If you select a stock or index, all of its derivatives are also restricted (options, futures, etc). For bonds, the ISIN listed may be just one of many matches.

For supported products, you can check "Make Non-Marginable" to restrict them from being used as collateral, for example to cover open option positions, or be leveraged to provide the account with additional buying power.

Symbol (Underlying)

This condition will be met if an order on the specified symbol is submitted on the selected order side. If you select a stock or index, all of its derivatives are also restricted (options, futures, etc).

Limit Initial Margin

This condition will be met if an order would cause the amount of initial margin to exceed the specified Amount/Percentage of NLV.

This condition will be met if an order would cause the Long (or Short) position concentration in the symbol to exceed the defined Amount/Percentage value. If you select a stock or index, all of its derivatives are also restricted (options, futures, etc).

This condition will be met if an order would cause the Long (or Short) position concentration in the issuer to exceed the defined Amount/Percentage value. If you select a stock or index, all of its derivatives are also restricted (options, futures, etc). For bonds, the ISIN listed may be just one of many matches. The associated time in force specifies how long the rule will remain active.

This condition will be met if an order would result in too high a concentration in Long (or Short) positions in the selected product or security type, as defined by the specified Amount/Percentage value. If you select a stock or index, all of its derivatives are also restricted (options, futures, etc). For bonds, the ISIN listed may be just one of many matches. The associated time in force specifies how long the rule will remain active.

Product or Security Type

This condition will be met if an order uses the specified product or security type.

Security types include: Stock, Options, Futures, Forex, Bonds, Futures Options, Commodity (Metals), Mutual Funds, Forward Contracts, Bills, Structure Products (iOPT), Warrants, and Combinations.

Product types include: US OTC (Penny) Securities, Foreign (Non US) Securities, American Depository Receipts (ADRs), Exchange Traded Funds (ETFs), Inverse ETFs, Leveraged ETFs,Currency conversions, Commodity Futures, Corporate Bonds, High-Yield (Junk) Bonds, Municipal Bonds, Stock Options, Index Options, Uncovered Options, Preferred Stocks, Country of Incorporation, Country of Listing, Stocks with market cap below threshold, Sector/Industry Classification, Limited Partnerships and Trading Venue and Security Type.

For supported products, you can check "Make Non-Marginable" to restrict them from being used as collateral, for example to cover open option positions, or be leveraged to provide the account with additional buying power.

The associated time in force specifies how long the rule will remain active.

Custom Trading Hours

This condition will be met if an order is submitted within the specified time range. The associated time in force specifies how long the rule will remain active

Cross Trades

This condition will be met if a pre-arranged crossing order is submitted.

Orders by Side

This condition will be met if an order using the specified order side (Buy, Sell, Sell Short or All) is submitted.

No Negative Cash

Negative trade day cash balance is not allowed.

Days to Expiration

This condition will be met if the number of days to expiration for the contract meets the specified "relation" criteria, e.g. if criteria states number of days to expiration is less than 5, and the contract expires in 4 days, trade will be rejected.

Trade Frequency - ONLY valid for Trade Monitors

This condition is met if the number of trades during the user-specified time period is greater than the user-specified number of trades. For instances that may be unclear, including partial fills of a large order or GTC orders that may fill over multiple days or months after the order is submitted:

• In the case of partial fills that may result in multiple trades from a single large-sized order are considered one (1) order each day. For example, for a 10,000 share order that fills over the course of a day in multiple "orders" in increments of 100 shares each, this will be considered one order, not 100 orders.
• GTC (Good Til Canceled) orders that may trades over many days or even months after an order is placed are counted as one (1) order each day the order results in one or more trades.

*Notes on "concentration" restrictions:

For all concentration restrictions (other than "margin" restrictions) we use Delta Dollars (which indicates potential loss exposure) in the calculation. You can see Delta Dollars in TWS by adding this Greeks field to any window. Delta Dollars = sum (signed_size * signed_delta*multiplier*underlying price).

• The Amount concentration restriction translates to: Do not allow the sum (Delta Dollars) of relevant positions to exceed the user-defined amount.
• The Percentage concentration restriction translates to: Do not allow the [sum (Delta Dollars) of relevant positions]/[account NLV] to exceed the user-defined percentage.

Gross Exposure Value Limit (changes take effect the next business day)

This condition is met if an order would cause the gross exposure value to exceed the defined amount.

• Apply this limit to traded or unfilled (outstanding) orders for the day.
• Choose Total to consider ALL orders, or Underlying to only consider orders on a specific underlying instrument. Note that when "Underlying" is specified, both stocks and all derivatives (options, futures etc.) are included.
• Specify the exposure limit, currency and TIF.

Trading in Fractions

This condition is met if an order quantity uses a fractional amount of shares.

• Use this rule in conjunction with the "Allow closing position orders" exclusion.