Minimum Trade Sizes Settings

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This group of settings allows you to set a minimum size of a trade you'll allow in the account.

You can specify these amounts as either a dollar amount ($) or percent of account value (%). If you enter both a dollar amount and a percent of account value amount, Tamarac Trading will apply the greater of these two values when determining minimum trade size and whether or not a trade is recommended.

You can enter a dollar and/or percent of account value for these security types:

Setting	More Information
Transaction Fee Funds	Enter a dollar and/or percentage value for the minimum trade size you'll allow for mutual funds that are transaction fee funds. To designate a mutual fund as a transaction fee fund, see Trade File Group Settings.
Equities/ETFs with Commissions	Enter a dollar and/or percentage value for the minimum trade size you'll allow for any equities and ETFs subject to a trading commission.
Non Fee Securities	Enter a dollar and/or percentage value for the minimum trade size you'll allow for mutual funds that do not have transaction fees and ETFs and equities that do not have commissions. Also included in this category are bonds, LPs, private placements, and separately managed accounts.
Min Trade Size Tolerance	Enter an amount, expressed as a dollar amount or percentage value, that acts as a trading buffer around the security goal while still adhering to your minimum trade size. This allows for recommended trades that might otherwise be restricted.

A position won't be traded back to target if the amount of the recommended trade is less than the minimum trade size you've set. Consider this example: A client currently holds 10% in AAPL. The goal is 14%, so the client is underweight AAPL, and the account would need an additional 4% in AAPL to reach its goal percentage.

Currently, the client's Equities/ETFs with Commissions minimum trade size setting is set at 5% and there is no Min Trade Size Tolerance set.

In this scenario, Tamarac Trading would not recommend a buy for AAPL. The buy of 4% needed to bring AAPL to its target is less than the account's minimum trade size setting of 5%.

However, if you were to change the Min Trade Size Tolerance to 2%, Tamarac Trading would recommend a 5% buy of AAPL, the minimum trade size allowed, bringing the account's holding in AAPL to 15%.

AAPL is now overweight, but the 15% holding is within the 2% tolerance band now set around the goal of the security: 14% goal ± 2% Min Trade Size Tolerance.

Notes

The Round Lot Size setting may demand a smaller trade within a round lot.
An exception can occur if an initial position in an account is smaller than the minimum trade size you specify here.
Minimum trade sizes are ignored during a Tax Loss Harvesting rebalance, the Tax Loss Harvesting and Rebalance, and when using cash substitutes.
In a directed trade, you can choose to adhere to or ignore an account's minimum trade setting.

Learn More

This is an account-level setting. To set a minimum investment amount at the security level, use Trade File Group Settings.