price limit

The maximum advance or decline from the previous day's settlement permitted for a contract in one trading session by the rules of the exchange. According to the Chicago Board of Trade rules, an expanded allowable price range set during volatile markets. Chicago Board of Trade glossary
————
The maximum price rise or decline permitted by an exchange in its commodities. The limit varies from commodity to commodity and may change depending on price volatility (variable price limits). Not all exchanges have limits; those that do set their limits relative to the prior day's settlement, for example, the CBOT may set its limit at 10› for corn. On day 2, corn may trade up or down 10› from the previous day's close of $3.00 per bushel; i.e., up to $3.10 or down to $2.90 per bushel. The CENTER ONLINE Futures Glossary
————
The maximum daily price fluctuations on a futures contract during any one session, as determined by the Exchange. (Also known as limit). Chicago Mercantile Exchange Glossary
————
A limit set by an exchange which restricts the amount by which a product's price may vary in a trading day, in order to prevent prices moving too far or too fast within a trading session. If the limit is breached during the session, trading is suspended for a set period of time, the theory being that this reduces any panic amongst traders and calms the market. At the end of the period, trading resumes. Few UK exchanges impose price limits, as they prevent investors from trading when they wish, and can therefore have potentially serious consequences. Dresdner Kleinwort Wasserstein financial glossary

Financial and business terms. 2012.

Look at other dictionaries:

  • Price limit —   An ISO term. The price limitation for an order. [3a15d] [35x] …   International financial encyclopaedia

  • price limit order — A customer order that specifies the price at which a trade can be executed. Chicago Board of Trade glossary …   Financial and business terms

  • daily price limit — The level within many commodity, futures, and options markets are allowed to rise or fall in a day. exchanges usually impose a daily price limit on each contract. Bloomberg Financial Dictionary * * *    The maximum amount, fixed by an exchange,… …   Financial and business terms

  • Variable Price Limit — A schedule of price variations above or below the accepted limits determined by the commodities exchanges for any one trading day. Variable price limits allow contracts to trade past their maximum daily changes. Exchanges determine whether a… …   Investment dictionary

  • stop with a price limit — A stop order with a specified limit price at which the order can be filled.fied worst price at which the order can be filled. Chicago Mercantile Exchange Glossary …   Financial and business terms

  • stop with a price limit - open outcry — A stop order with a specified worst price at which the order can be filled. Chicago Mercantile Exchange Glossary …   Financial and business terms

  • daily price limit — Fin the amount by which the price of an option can rise or fall within one trading day …   The ultimate business dictionary

  • Price-cap regulation — is a form of regulation designed in the 1980s by UK Treasury economist Stephen Littlechild, which has been applied to all of the privatized British network utilities. It is contrasted with rate of return regulation, in which utilities are… …   Wikipedia

  • limit — See price limit, position limit, and variable limit. The CENTER ONLINE Futures Glossary See trading limit. Bloomberg Financial Dictionary A contract s maximum price advance or decline from the previous day s settlement price permitted in one… …   Financial and business terms

  • limit price — Also known as price limit. Some futures contracts price movements are restricted by the exchange on which they are traded. They are limited to a range that is plus or minus a specified amount relative to the prior day s settlement price. For… …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.