Position Limits

Position limits are the most heavily lawyered corner of the options rulebook. The prohibition itself is short; the contract numbers, the aggregation tests and the exemptions around it are where the exam questions live.

Who Does the Position Limit Bind, and What Does It Aggregate?

The prohibition is written against the firm. Except with the prior permission of the President or a designee, to be confirmed in writing, no Trading Permit Holder (TPH) shall make an opening transaction on any exchange, for any account in which it has an interest or for the account of any customer, in two situations.

Both are triggered by the firm having reason to believe that as a result of the transaction the firm or its customer would, acting alone or in concert with others, directly or indirectly:

• Control an aggregate position in an option contract dealt in on the Exchange in excess of 25,000 or 50,000 or 75,000 or 200,000 or 250,000 option contracts, or such other number as the Exchange fixes from time to time for one or more classes or series.
• Exceed the applicable position limit fixed from time to time by another exchange for an option contract not dealt in on the Exchange, when the Trading Permit Holder is not a member of the other exchange on which the transaction was effected.

The first branch states what is aggregated. The limit counts contracts, whether long or short, of the put type and the call type on the same side of the market respecting the same underlying security.

Combining for that purpose means long positions in put options with short positions in call options, and short positions in put options with long positions in call options.

A separate duty applies once a position already exists. Should a Trading Permit Holder have reason to believe that a position in any account in which it has an interest, or for the account of any customer, is in excess of the applicable limit, it shall promptly take the action necessary to bring the position into compliance.

The rule's own examples, using the 25,000 contract limit, show the arithmetic.

Exam Tip: Gotchas

• The rule binds the Trading Permit Holder rather than the customer. It prohibits the FIRM from making the opening transaction, so the compliance question is what the firm had reason to believe.
• The two aggregations are counted separately against the same number. A trader can sit near the limit on the long-call-plus-short-put side and near it again on the short-call-plus-long-put side.
• The second branch reaches products the Exchange does not list. A firm can breach by exceeding another exchange's limit in a contract not dealt in on Cboe, where the firm is not a member of that other exchange.

Which Contract Limit Applies to an Equity Option?

The five contract limits are assigned by the underlying security's recent trading volume and shares outstanding. Each test above the default is a disjunction: either branch qualifies.

Two conversion rules sit alongside the table. For determining compliance, 10 mini-option contracts equal one standard contract overlying 100 shares. Positions in Short Term Option Series, Monthly Options Series and Quarterly Options Series are aggregated with positions in options contracts on the same underlying security.

Exam Tip: Gotchas

• Each higher limit has two independent routes. Meeting the volume-only branch is enough, and so is meeting the lower volume figure together with the shares-outstanding figure.
• The default limit is defined negatively. The lowest limit applies to an underlying that does not meet the requirements for a higher one, so it is a residual rather than a test.

When Does a Change in the Limit Take Effect?

Every six months the Exchange reviews the status of underlying securities to determine which limit should apply. The direction of the change decides the timing.

• A higher limit will be effective on the date set by the Exchange.
• A change to a lower limit will take effect after the last expiration then trading, unless the requirement for the same or a higher limit is met at the time of the intervening six-month review.

The Exchange also keeps a discretionary fast track. If, after a six-month review, an increase in volume and/or outstanding shares would make a stock eligible for a higher position limit prior to the next review, the Exchange in its discretion may immediately increase that limit.

Exam Tip: Gotchas

• A reduction can be cancelled by the next review. It takes effect after the last expiration then trading unless the same or a higher limit is met at the intervening six-month review.
• The mid-cycle increase is discretionary and one-directional. The rule lets the Exchange raise a limit immediately between reviews; it gives no matching power to cut one immediately.

When Are Two Accounts Treated as One?

Control exists, under both the position limits rule and the exercise limits rule, where an individual or entity makes investment decisions for an account or accounts, or materially influences directly or indirectly the actions of any person who makes investment decisions.

Control is then presumed in five circumstances.

• Among all parties to a joint account who have authority to act on behalf of the account.
• Among all general partners to a partnership account.
• Where an individual or entity holds an ownership interest of 10 percent or more in an entity, an ownership interest of less than 10 percent not precluding aggregation, or shares in 10 percent or more of the profits and/or losses of an account.
• Where accounts have common directors or management.
• Where a person or entity has the authority to execute transactions in an account.

A presumption can be rebutted by proving the factor does not exist, or by showing other factors which negate the presumption. The rebuttal proof must be submitted by affidavit and/or such other documentary evidence as may be appropriate in the circumstances.

The Exchange will also consider four factors in determining whether aggregation of accounts is required: similar patterns of trading activity among separate entities; the sharing of kindred business purposes and interests; whether common supervision extends beyond assuring adherence to each entity's investment objectives and restrictions; and the degree of contact and communication between directors or managers of separate accounts.

The decision to grant non-aggregation is not retroactive, and the presumption of control exists until it is determined not to exist.

Exam Tip: Gotchas

• An ownership interest under 10 percent does not preclude aggregation. The rule states the point expressly inside the presumption, so a nine percent stake is not a safe harbor.
• Non-aggregation runs forward only. A determination that control does not exist is not retroactive, and the presumption governs everything up to that determination.
• Rebuttal has a form requirement. It must be submitted by affidavit and/or other appropriate documentary evidence, not by assertion.

Which Hedged Positions Are Exempt From the Equity Limits?

The equity hedge exemption splits its list. Six strategies are exempt from the established position limits, and two more are subject to a limit equal to five times the standard limit.

The rule defines the instrument it just relied on. An OTC option contract is an option contract that is not listed on a national securities exchange or cleared at the Options Clearing Corporation (OCC).

The equity hedge exemption is in addition to the standard limit and other exemptions available under Exchange rules, interpretations and policies.

Exam Tip: Gotchas

• The two collars are the only strategies carrying a moneyness test. Neither side of a collar or a reverse collar may be in-the-money at the time the position is established.
• Two of the eight items are capped rather than exempt. The over-the-counter pairings take a limit of five times the standard limit, so they reduce the constraint without removing it.
• Exempt does not mean instead of. The exemption is in addition to the standard limit and to other exemptions, so a firm can stack it with another available exemption.

What Is the Delta-Based Equity Hedge Exemption?

This exemption is also in addition to the standard limit and other exemptions. An equity option position of a Trading Permit Holder, a non-Trading Permit Holder affiliate of one, or a customer that is delta neutral is exempt from the established equity position limits.

Delta neutral refers to an equity option position that is hedged, in accordance with a permitted pricing model, by a position in the underlying security or one or more instruments relating to it, to offset the risk that the option position's value will change with incremental changes in the underlying's price.

The Exchange's own note is part of the rule text: the exemption is not currently available to customers, and customers may not seek to rely on it. Customers seeking to use it may only hedge in accordance with a pricing model maintained and operated by the clearing corporation, referred to as the OCC Model.

Where the underlying security of an equity option position is an exchange-traded fund based on the same index as an index option, that position and any position in the underlying fund may be combined with such an index option position and/or correlated instruments, under the delta-based index hedge exemption, for calculating this exemption.

A position that is not delta neutral stays subject to the equity position limits, subject to other available exemptions, but only the option contract equivalent of the net delta of the position is subject to the applicable limit.

A permitted pricing model is one of five things.

Exam Tip: Gotchas

• Two of the five models are restricted to their own user. Only the registered over-the-counter derivatives dealer may rely on its model, and only the national bank may rely on its own.
• A partly hedged position is not simply outside the exemption. Where the position is not delta neutral, only the option contract equivalent of its net delta counts against the limit.
• The customer branch is currently switched off. The rule states the exemption is not available to customers, and that customers may not seek to rely on it.

When Will the Exchange Grant a Market-Maker or Facilitation Exemption?

Two discretionary exemptions exist for firms rather than strategies.

The Market-Maker exemption applies only to Market-Makers seeking an exemption to the standard position limits for the purpose of assuring that there is sufficient depth and liquidity in the marketplace, and not to confer a right upon the applicant.

An exemption may be granted for the purpose of maintaining a fair and orderly market in the options on a given underlying security. Generally it will be granted only to a Market-Maker who has requested one, holds an appointment to the option class, whose positions are near the current position limit, and who is significant in terms of in-person daily volume.

The rule interprets "near the limit" as positions generally within 10% of the applicable limits in equity options, and 20% of the applicable limits in broad-based index options, bond or note options.

• A request for an exemption from position and exercise limits must be in writing and must state the specific reasons why an exemption should be granted, and it should be submitted to the Department of Market Regulation.
• To ensure same-day review, exemption requests must be submitted no later than 2:00 p.m.
• If granted, the exemption is effective at the time the decision is communicated, and retroactive exemptions will not be granted.
• Its size and length are determined case by case, and an exemption will usually be granted until the nearest expiration.

The firm facilitation exemption is available to a TPH organization for its proprietary account, in non-multiply-listed Exchange options, to facilitate either orders for its own customer, meaning one that will have the resulting position carried with the firm, or orders received from or on behalf of a customer for execution only against the firm's proprietary account.

The firm must receive Exchange approval before executing facilitating trades. The exemption is in addition to the standard limit and other exemptions, and it is capped by a chart.

The rule then imposes two execution conditions on the paired orders, a five-business-day hedge and documentation requirement, and three continuing duties on the facilitation firm. Absent reasonable justification or excuse, a violation withdraws the facilitation exemption and may be grounds for denying a later application.

The two execution conditions come first. Neither the customer order nor the facilitating order may be contingent on all-or-none or fill-or-kill instructions, and the orders may not be executed until the procedures of the Cboe crossing orders rule have been satisfied and crowd members have been given a reasonable time to participate.

Within five business days after execution, the firm must hedge all exempt options positions that have not previously been liquidated, and furnish documentation reflecting the resulting hedging positions.

The firm shall liquidate and establish its customer's and its own options and stock positions or their equivalent in an orderly fashion, and not in a manner calculated to cause unreasonable price fluctuations or unwarranted price changes.

It shall also not initiate or liquidate its customer's or its own stock position or its equivalent with an equivalent index option position with a view toward taking advantage of any differential in price between a group of securities and an overlying stock index option.

Finally, it must promptly notify the Exchange of any material change in the exempted options position or the hedge, and may not increase the exempted option position once it is closed unless approval is received again on a reapplication.

Exam Tip: Gotchas

• The Market-Maker exemption confers no right. The rule says its purpose is market depth and liquidity and that it is not to confer a right upon the applicant, so a qualifying Market-Maker can still be refused.
• A late request loses same-day review, not the application. Requests must arrive no later than 2:00 p.m. to ensure same-day review, and no exemption is ever granted retroactively.
• The facilitation exemption is limited to non-multiply-listed options. It also runs only to the firm's own proprietary account and to the two order shapes the rule names.
• The facilitation hedge deadline is five business days after execution. Documentation of the resulting hedge positions goes to the Department of Market Regulation, and the firm must reapply before increasing a closed exempt position.

Which Options Take the Same Limits as Equity Options?

Options on shares or other securities representing interests in registered investment companies, or series of them, organized as open-end management investment companies, unit investment trusts or similar entities take the same position limits as equity options, provided they satisfy the criteria in the Cboe underlying security criteria rule.

The exception is a chart of fifteen exchange-traded products carrying their own numbers, running from 300,000 contracts for DIA up to 3,600,000 contracts for SPY.

Exam Tip: Gotchas

• The default for these fund products is the equity limit, not a special one. Only the fifteen named exchange-traded products take their own contract numbers.

Which Limits Apply to Index Options?

Each index family has its own rule, and the position limit follows the index classification taught in the lesson on index options.

Broad-based index options. Under the broad-based index option position limits there are no position limits for broad-based index option contracts, including reduced-value option contracts and micro-option contracts, on a named list of classes.

That list covers the S&P 500 Index (SPX), the Cboe Volatility Index (VIX), DJX, OEX, XEO, NDX, XND, RUT, VXN, VXD, VXST, the S&P 500 Dividend Index, SPEQF, SPEQX, BXM at one-tenth value, and the three Cboe S&P 500 classes (AM/PM Basis, Three-Month Realized Variance and Three-Month Realized Volatility).

All other broad-based index option contracts are subject to a contract limitation fixed by the Exchange, which shall not be larger than the limits in its chart.

Industry index options. Subject to the procedures the industry index option position limits state for changes, industry index option contracts take one of three limits.

• 18,000 contracts if the Exchange determines, at a review, that any single underlying stock accounted on average for 30% or more of the index value during the 30-day period immediately preceding the review.
• 24,000 contracts if any single underlying stock accounted on average for 20% or more of the index value, or any five underlying stocks together accounted on average for more than 50% of the index value, but no single stock in the group accounted on average for 30% or more, in each case during that 30-day period.
• 31,500 contracts if the conditions requiring a lower limit have not occurred.

The Exchange makes those determinations at the commencement of trading of the options on the Exchange, and thereafter reviews the determination semi-annually on January 1 and July 1.

The change procedure is asymmetric. Where the limit in effect is lower than the maximum the criteria permit, the Exchange may effect an appropriate increase immediately.

Where the limit in effect exceeds that maximum, the Exchange shall reduce it to a consistent level, but the reduction shall not become effective until after the expiration date of the most distantly expiring open series on the date of the review, and shall not become effective at all if the Exchange determines at the next succeeding semi-annual review that the existing limit is consistent with the criteria.

Micro narrow-based index options. The micro narrow-based index option position limits give a methodology, not a figure, for a cash-settled option on a qualifying micro narrow-based index, in six steps.

• Determine the market capitalization of the S&P 500 Index.
• Calculate the notional value of a position at the limit in the Chicago Mercantile Exchange (CME) S&P 500 futures contract, whose position limit is 20,000 contracts in all months combined and whose index multiplier is $250, so the notional value is 20,000 times the index level times 250.
• Calculate the Market Capitalization Ratio, the S&P 500 market capitalization divided by that notional value.
• Determine the market capitalization of the micro narrow-based index by adding the market capitalization of each underlying security component.
• Determine the notional value of the micro narrow-based index option, its index level times its contract multiplier.
• Set the contract position limit at the index's market capitalization divided by the product of the option's notional value and the Market Capitalization Ratio.

The result is then rounded to the nearest 1,000 contracts using standard rounding, and a calculated limit of 400 or greater but less than 1,000 contracts is rounded up to 1,000. Where the calculated limit is less than 400 contracts, the Cboe index designation rule does not apply to that index.

Individual stock or ETF based volatility index options. The volatility index option position limits give these a limit equal to 50,000 contracts on either side of the market, and no more than 30,000 contracts in the nearest expiration month. They are not aggregated with the index component option contracts on the corresponding underlying stock or fund.

Aggregation across index rules. Several sentences decide what counts together.

Exam Tip: Gotchas

• No position limit is a list, not a category. A broad-based index option is unlimited only if its class is on the named list; every other broad-based class takes a limit the Exchange fixes, which may be no larger than the chart figure.
• A volatility index option can carry a limit. The Russell 2000 volatility index sits in the chart at 50,000 contracts with a near-term restriction, so "volatility index" is not itself an exemption.
• The industry index middle test has a ceiling built into it. The five-stock branch applies only where no single stock in the group averaged 30% or more, because that single-stock figure routes to the lowest limit instead.
• An industry index reduction is doubly delayed. It waits for the most distantly expiring open series and then disappears entirely if the next semi-annual review finds the existing limit consistent.

Which Hedge Exemptions Apply to Index Options?

Each index rule carries its own hedge exemption, and each is in addition to the standard limit and other exemptions.

The broad-based index hedge exemption adds 65,000 contracts for S&P 500/Barra Growth or Value and 75,000 contracts for other broad-based index options. It requires prior Exchange approval specifying the maximum number of exempt contracts, and an account not carried by a Cboe Options TPH organization must be carried by a member of a self-regulatory organization participating in the Intermarket Surveillance Group.

The qualified portfolio behind it is defined two ways. It is a net long or short position in common stocks in at least four industry groups, containing at least twenty stocks, none of which accounts for more than fifteen percent of the value of the portfolio, or in securities readily convertible, and in the case of convertible bonds economically convertible, into such common stocks.

It may also, or instead, be a net long or short position in index futures contracts or in options on index futures, or long or short positions in index options or index warrants, for which the underlying index is included in the same margin or cross-margin product group cleared at the clearing corporation as the exempt class.

To remain qualified, a portfolio must at all times meet these standards notwithstanding trading activity.

The exemption applies to the unhedged value of that portfolio, computed in three steps.

• Total the values of the net long or short positions of all qualifying products in the portfolio.
• For positions in excess of the standard limit, subtract the underlying market value of any economically equivalent opposite side of the market calls and puts in broad-based index options, and of any opposite side of the market positions in stock index futures, options on them, and any economically equivalent opposite side positions, assuming no other hedges for these contracts exist.
• Equate the market value of the resulting unhedged portfolio to exempt contracts by dividing it by the correspondent closing index value and dividing that quotient by the index multiplier or 100.

Only the following qualified hedging transactions and positions are eligible, and the list has seven members.

• Long puts used to hedge the holdings of a qualified portfolio.
• Long calls used to hedge a short position in a qualified portfolio.
• Short calls used to hedge the holdings of a qualified portfolio.
• Short puts used to hedge a short position in a qualified portfolio.
• A collar, a debit put spread position, and a short call position accompanied by a debit put spread position. These three may be effected only in conjunction with a qualified stock portfolio, and only for non-P.M.-settled, European-style index options.

Neither side of the collar transaction, and neither side of the short call and long put transaction, can be in-the-money at the time the position is established, and each of those two positions is treated as one contract.

The hedge exemption account carries these duties.

• It shall liquidate and establish options, stock positions, their equivalent or other qualified portfolio products in an orderly fashion, and shall not initiate or liquidate positions in a manner calculated to cause unreasonable price fluctuations or unwarranted price changes.
• It shall not initiate or liquidate a stock position or its equivalent with an equivalent index option position with a view toward taking advantage of any price differential between a group of securities and an overlying stock index option.
• It shall liquidate any options prior to or contemporaneously with a decrease in the hedged value of the qualified portfolio which would render those options excessive.
• It shall promptly notify the Exchange of any material change in the qualified portfolio that materially affects its unhedged value.

Two compliance rules close the interpretation. Positions included in a qualified portfolio which serve to secure an index hedge exemption may not also be used to secure any other position limit exemption granted by the Exchange or by any other self-regulatory organization or futures contract market.

And a Trading Permit Holder or TPH organization maintaining a broad-based index option position in its own account or a customer account, with reason to believe it exceeds the applicable limit, shall promptly take the action necessary to bring it into compliance. Failure to do so is deemed a violation of both the Cboe position limits rule and the broad-based index option position limits.

The industry index hedge exemption may not exceed twice the standard limit established under the industry index option position limits. Each option position exempted must be hedged by an equivalent dollar amount of the underlying component securities or securities convertible into them.

A proviso narrows it further: in applying that hedge, each option position to be exempted must be hedged by a position in at least 75% of the number of component securities underlying the index. The underlying value of the option position may not exceed the value of the underlying portfolio.

The portfolio value is the total market value of the net stock position, from which, for positions in excess of the standard limit, is subtracted the underlying market value of any offsetting calls and puts in the respective index option, any offsetting positions in related stock index futures or options, and any economically equivalent positions, assuming no other hedges for these contracts exist.

The delta-based index hedge exemption exempts an index option position that is delta neutral, meaning hedged in accordance with a permitted pricing model by a position in one or more correlated instruments. Correlated instruments are securities and other instruments that track the performance of, or are based on, the same underlying index as the option position, but not including baskets of securities.

Customers seeking to use it may only hedge in accordance with the OCC Model. A position that is not delta neutral remains subject to the index limits, with only the options contract equivalent of its net delta counted. The same exemption may also be applied to industry index option positions.

The volatility index hedge exemption works the same way for individual stock or exchange-traded fund based volatility index options. It requires prior Exchange approval specifying the maximum exempt contracts, and Intermarket Surveillance Group carrying for an account not carried by a Cboe Options TPH organization.

Its qualified portfolio is a net long or short position in those volatility index futures contracts, or options on them, or long or short positions in those volatility index options, for which the underlying index is in the same margin or cross-margin product group cleared at the clearing corporation as the exempt class. A portfolio must at all times meet these standards notwithstanding trading activity.

Its unhedged value is computed the same three ways, its list of seven eligible hedging transactions is the same, its collar and short-call-plus-debit-put-spread positions carry the same moneyness test and each counts as one contract, and its account carries the same orderly-liquidation, excess-liquidation and prompt-notification duties. An exemption is effective when the decision is communicated and no retroactive exemption will be granted.

Exam Tip: Gotchas

• One qualified portfolio cannot secure two exemptions. Positions used to secure an index hedge exemption may not also secure any other position limit exemption from this or any other self-regulatory organization or futures contract market.
• The industry index hedge has a component-count floor. Each exempted option position must be hedged by a position in at least 75% of the number of component securities underlying the index.
• Three of the seven eligible index hedges are strategy-restricted. The collar, the debit put spread and the short call with a debit put spread are available only in conjunction with a qualified stock portfolio and, for the broad-based exemption, only for non-P.M.-settled European-style index options.
• The qualified portfolio test is continuous. A portfolio must meet the standards at all times notwithstanding trading activity, so drifting out of them mid-life ends the qualification.

Which Limits Apply to FLEX Options?

The flexible exchange (FLEX) option position limits set their ceilings by reference to the non-FLEX equivalents, with one absolute figure and several multipliers.

For determining compliance with these position limits, if a FLEX index option has a multiplier of one, 100 contracts for that class equal one contract for a FLEX index option with a multiplier of 100 with the same underlying index.

There are no position limits for the named broad-based FLEX index option contracts, including reduced-value option contracts and FLEX index option contracts with a multiplier of one.

Those named classes are SPX, VIX, NDX, XND, OEX, RUT, DJX, XEO, VXN, VXD, SPEQF, SPEQX, the S&P 500 Dividend Index, BXM at one-tenth value, and the three Cboe S&P 500 classes (AM/PM Basis, Three-Month Realized Variance and Three-Month Realized Volatility).

A reporting duty replaces the limit. It falls on each Trading Permit Holder or TPH organization other than a FLEX Market-Maker that maintains a FLEX broad-based index option position on the same side of the market above the trigger.

That firm, whether the position is for its own account or for the account of a customer, must report information as to whether the positions are hedged and provide documentation as to how they are hedged.

The trigger is 100,000 contracts for the main named classes and 1 million contracts for BXM at one-tenth value and DJX.

In calculating the contract-reporting amount, reduced-value contracts are aggregated with full-value contracts and counted by the amount by which they equal a full-value contract. So 10 XSP options equal 1 SPX full-value contract, and 100 multiplier-one FLEX index options equal one multiplier-100 contract.

FLEX equity options have no position limits, other than one carve-out and the aggregation rules below.

The carve-out is specific. FLEX equity options where the underlying security is an exchange-traded fund that is settled in cash under the Cboe FLEX option series rule are subject to the equity position limits and to the exercise limits, and positions in those cash-settled options are aggregated with positions in physically settled options on the same underlying fund for calculating both.

FLEX equity options also carry their own report. It falls on each Trading Permit Holder or TPH organization other than a Market-Maker or a Designated Primary Market-Maker (DPM) that maintains a position on the same side of the market above the standard limit for non-FLEX equity options of the same class.

The report, required whether the position is held for the firm's own account or for a customer, covers the FLEX equity option position, positions in any related instrument, the purpose or strategy for the position, and the collateral used by the account.

Aggregation is switched off by default and then switched back on in four cases. FLEX option positions are not aggregated with positions in non-FLEX options other than as provided below and in the cash-settled fund carve-out, and FLEX index option positions on a given index are not aggregated with options on any stocks included in the index or with FLEX index positions on another index.

Exam Tip: Gotchas

• The FLEX default is no aggregation with non-FLEX options. Four stated triggers switch it on, and outside them a FLEX index position is not even aggregated with FLEX positions on another index.
• A cash-settled fund FLEX equity option is the exception to "no FLEX equity limits". It takes the ordinary equity position and exercise limits and aggregates with physically settled options on the same fund.
• Two of the aggregation triggers start two business days early. They commence at the close of trading two business days prior to the last trading day of the quarter, or of the week.
• A no-limit FLEX class still generates paperwork. Above the stated contract triggers, each Trading Permit Holder or TPH organization other than a FLEX Market-Maker must report whether the position is hedged and document how.

What Should You Check on Exam Day?

• Read the position limit question as a question about the firm's belief at the time of an opening transaction, not about the customer's intent.
• Aggregate long calls with short puts, and short calls with long puts, and test each combination separately against the same contract number.
• Classify the underlying before picking a number: equity, fund product, broad-based index, industry index, micro narrow-based index, volatility index or FLEX.
• On an exemption, confirm the approval, the hedge and the ongoing portfolio test, and check whether the rule states the exemption is in addition to the standard limit, as the hedge, delta and facilitation exemptions do.
• Check whether the scenario triggers one of the four FLEX aggregation rules, because outside them FLEX and non-FLEX positions are counted apart.