You've posted in the Index Futures section. Index futures contracts are cash settled. There is no limit. Position limits are a different topic. Both sides of a trade use the same per-se "vetting" process as is required by the exchange venue.
It's called "open interest", which keeps tabs on "total number of futures contracts held by market participants at the end of the trading day" (according to CME). Source: https://www.cmegroup.com/market-data/browse-data/exchange-volume.html
Imagine you're in a bustling marketplace, and there are people buying and selling all sorts of goods. In the world of futures trading, open interest is like a count of how many deals are still active at a given time. Definition: Open interest is the total number of futures contracts that people have opened but not yet closed. So, it's the contracts that are still "alive" in the market. For every person buying a futures contract, there's someone else selling it, so the total open interest stays balanced. Dynamic Nature: This number isn't set in stone; it changes every day. When someone creates a new futures contract (let's say they're betting that the price of gold will go up), the open interest goes up by one contract. When someone closes their existing contract (maybe because they changed their mind), the open interest goes down by one contract. No Fixed Number: Here's where it gets interesting. Unlike, say, the population of a city, there's no fixed or predetermined number of contracts in futures markets. It can go up or down based on how much people are trading. Some contracts might have a lot of open interest, while others have very little. What It Tells Us: High open interest suggests a busy and active market. That can mean narrower price differences between buying and selling, which is good for traders. It can also indicate that many people have a similar opinion about where prices are going. Low open interest might mean a quieter market, wider price differences, and possibly more unpredictable price swings. Balancing Act: Remember, for every person buying a futures contract (let's call them the optimist), there's someone else selling it (the skeptic). So, open interest always balances out. When someone changes their mind and sells a contract they previously bought or buys a contract they sold, the open interest linked to that contract decreases. In a nutshell, futures open interest is like a tally of all the ongoing deals in the futures market. It gives us insights into market activity and what traders are thinking. But keep in mind, it's a constantly changing number, not a fixed quantity.
Thank you all for the information. Honestly, I feel a little embarrassed for not thinking to check open interest. What I was ultimately after was the market cap of an index (front month). Eyeballing open interest, I got these numbers ES: $485 B NQ: $74 B YM: $15 B
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