Understanding Daily Notional Limits for Trading Agents

A daily notional limit defines the maximum total value of trades that a trading agent can place in a single day. It is a policy rule signed by the account owner and enforced by the trading infrastructure when the agent attempts to submit an order. The limit is measured in the base currency of the market and resets after a defined 24‑hour period.

Why Use a Daily Notional Limit?

Owners of automated agents often need a simple, quantitative guard against runaway trading behavior. By capping the notional amount, they can ensure that even if the agent’s logic misbehaves, the potential loss is bounded by the amount it is allowed to trade each day. This is especially useful when the agent operates across multiple markets where volatility can spike unexpectedly.

How Is the Limit Configured?

The limit is part of the owner‑signed policy attached to the agent’s key. When the owner creates the key, they specify a numeric value for the daily notional field. The policy is stored on‑chain (or in the system’s authoritative state) and is consulted each time the agent signs a new order. No additional software on the agent side is required to enforce the rule.

• ·The owner generates an agent key with a scoped authority.
• ·The policy includes a daily notional amount expressed in the market’s quote currency.
• ·The policy also defines the reset time (typically UTC midnight).

What Happens When the Limit Is Reached?

If the cumulative notional of successfully placed orders reaches the configured ceiling, any further order attempts are rejected with a clear error indicating the limit has been exceeded. The rejection does not cancel existing positions; those remain open until the owner decides to close them or market forces act.

Impact on Strategy Execution

A strategy that relies on frequent, high‑value trades may find its activity throttled once the limit is hit. The agent must either pause, adjust trade size, or wait for the next reset period. This can reduce potential upside, but it also prevents the strategy from unintentionally exhausting capital in a single day.

How Does the Limit Interact With Other Controls?

Daily notional limits are one of several owner‑signed controls. They coexist with order‑size caps, daily loss limits, and expiry dates. Each control is evaluated independently, and a violation of any one results in order rejection. The combination provides layered risk management without requiring the agent to implement its own safety checks.

Common Misconceptions

A frequent misunderstanding is that the daily notional limit also restricts withdrawals. Withdrawal authority is separate and requires explicit owner‑signed intent, so the limit only affects order placement. Another misconception is that the limit guarantees protection against loss; it merely caps exposure to new trades, while existing positions can still move against the owner.

"Limits are a safety net, not a safety guarantee. They reduce the chance of large, unexpected exposure, but they do not eliminate market risk."

Practical Tips for Setting an Effective Limit

1. 01Start with a modest fraction of the total allocated capital, such as 10‑20 % of daily trading budget.
2. 02Monitor the agent’s typical notional usage over a few weeks and adjust the limit to match realistic needs.
3. 03Consider the volatility of the markets the agent trades; higher volatility may warrant a lower limit to curb rapid swings.
4. 04Document the chosen limit and the rationale so future owners can understand the risk posture.

Further Reading

For a broader view of how to give an AI agent a trading account, see Felix documentation. To learn about non‑custodial trading setups, read Felix documentation.