price limits


Limit

1. The maximum amount of price change a futures contract is allowed to undergo on a given trading day. Limits are mandated by the exchanges on which futures contracts trade, and exist in order to reduce volatility in the market. It is also called a trading limit.

2. The maximum number of transactions in commodities that an individual may make on an exchange on a given trading day. Limits are mandated either by the Commodity Futures Trading Commission or by the exchanges on which commodity contracts trade. It is also called a trading limit.

3. See: Limit order.

Price Limit

1. See: Daily trading limit.

2. See: Limit price.

price limits

For a given futures contract, the maximum price change from the previous day's settlement price that is permitted during a trading session. These limits are sometimes adjusted in fast-moving markets.