An Exposure violation occurs when a trader abuses Tradovate/Rithmic limitations to trade beyond their allowed contract limits defined on the account.
Micro-contract exposure is converted to mini-contract exposure using this factor:
Micro-to-mini factor = Max Micro Contracts / Max Mini Contracts
At any point in time, an account’s total exposure is:
Exposure = (Total Mini Contracts) + (Total Micro Contracts / Micro-to-mini factor)
If the total exposure is greater than the account’s max mini-contract limit, the system records an exposure violation and notifies the user.
Example:
Apprentice 50k has 2 minis / 20 micro limit. The multiplier is 20 / 2 = 10.
If Apprentice 50k account (limits are 2 minis / 20 micros) is long 2 NQ and 1 MNQ.
The account has exposure 2 + 1 / 10 = 2.1 which is bigger than 2. This account is over exposed.