Dynamic Limit Spread

Dynamic Limit Spread Setting

The Dynamic Limit Spread is an optional setting that allows traders to define the minimum price difference (spread) required between the buy and sell legs before executing a trade. This ensures that spread or basis trades only execute when the price differential aligns with the trader’s profitability criteria.

How It Works

• Traders set a minimum spread threshold for execution.

• If the market spread is too narrow, the system pauses execution until the price difference meets or exceeds the defined threshold.

• This prevents trades from being executed at unprofitable spreads, ensuring favorable pricing for spread and basis strategies.

When to Use This Setting

• Spread Trading – Ensures that buy and sell legs of a trade execute only when the spread is sufficient.

• Basis Trades – Helps traders avoid executing futures vs. spot trades at an unprofitable basis.

• Controlled Arbitrage – Allows traders to lock in profits by only executing when the price difference justifies the trade.

This feature is useful for traders looking to optimize trade execution by ensuring that spreads meet profitability requirements before execution.