User Help System
Credit Controls
Clearing Member and Execution firm administrators can use the Credit Controls function to manage CME Globex, CME ClearPort and CME Direct account level credit (preferred currency and maximum credit limit, for the overall account) and order submission (maximum permissible long / short) limits, for a product group and individual products.
Trader / Trader Risk Administrators can use Credit Controls to search and view risk settings, which includes credit and maximum permissible long / short quantity limits.
Order handling:
- Credit limit checks utilize top of day trading activity; starts flat each trading day.
- Orders that are within limits are approved for execution.
- CME Globex trades, submitted using CME Direct, can be viewed in Firmsoft.
- Orders are rejected if they contain restricted products or requested quantities exceed limits.
- Margin rates and intra-commodity spread credits are used to determine credit usage, by product and type of trade.
- Completed orders are viewable in Front-End Clearing (FEC+).
- Options product limits are set independently of futures and are subject to overall credit limit.
Rejected order handling: An authorized clearing / execution firm administrator must increase the limit and / or configure additional products.
- To manage account credit controls:
Users can specify the Currency, Credit Limit, Maximum Quantity Long / Short Limits (product quantity limits are not required for CME ClearPort).
- After confirming Markets, Products and Brokers, go to the Credit Controls page.
- Specify the Currency and Credit Limit (CME Direct) / RAV Limit (CME ClearPort) and product limits (Maximum quantity long / short).
Margin rates and intra-commodity spread credits are used to determine credit usage, remaining credit and percent used; by product and type of trade.
- CME Direct - Credit Controls
Credit Limit is required.
- CME ClearPort - Credit ControlsRAV Limit is required.
- Inline Credit Controls (ICC): (optional) Specify Clearing and / or Execution Firm position limits.
- For the Permissible Products field, select from available options:
- Show all products with unique limits: Filter the Product list to products that have user specified limits.
- Show all products tradable in this account: View all authorized products, via Market Types - Available Products.
Note: For Globex ICC only: Default value is Not Set, which uses the Globex Admin Policy settings to determine order entry and trading permission.
Admin Settings - Unset Limit Rule: When limits are not set (by either Clearing Member or Execution Firm) for the specified account, the account is limited to trading products within the overall firm Credit Limit.
Additional considerations: Refer to calculation option limits, below.
- To finalize Credit Control settings, select Save.
- (For new / pending accounts) On the account creation dialog that appears, select an account creation option:
Create Account as:
- Active: Finalize credit controls and activate the account. Additional configuration, for other applications / services, may be necessary.
- Inactive: Finalize credit controls, but do not activate the account. Additional configuration can be performed or the account configuration can be used as the basis for additional related accounts (via the Copy function).
Note: To activate the account later, search and select the inactive account.
From the Account Settings page, select Activate.
Additional Options:
Manage Spot FX Credit Controls
Calculating / Setting Option Limits
Risk controls allow setting long / short option limits, which is an optional setting. If limits are not set, trading may occur up to the specified futures long / short product limit and/or available credit.
Options are converted into futures equivalents by multiplying options quantity * delta.
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Example |
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Account: ABC Credit Limit: $5,000,000 Product: Eurodollar Futures Max Long Quantity Limit: 10,000 Max Short Quantity Limit: 10,000 |
Product: Eurodollar Options Max Long Quantity Limit: 20,000 Max Short Quantity Limit: 20,000 Avg. Maintenance Margin Rate for Eurodollars: $400 |
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The order is entered as: Buy 10,000 Eurodollar DEC14 9950 Straddle GEZ4 9950 Calls (.51Δ) GEZ4 9950 Puts (.49Δ) Note: The example assumes there are no existing fills or orders for the account. |
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Futures |
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Max Qty Short Usage = Buy Puts (10,000*.49) = 4,900 |
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Options |
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Max Qty Long Usage = Buy Call (10,000) + Buy Put (10,000) = 20,000 Max Qty Short Usage = 0 Margin Usage = 5,100 * $400 ($2,040,000) |
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| ClearPort Options | |
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Max Long Exposure Limit = Options bought (Call / Put) – Options Sold Max Short Exposure Limit = Options sold – Options bought |
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