price limits

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Related to price limits: Daily price 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

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.
References in periodicals archive ?
ascertain whether daily price limits aid or distort informational efficiency in the Nigerian equity market;
Formally it was Subramanyam (1994) who elaborated the formal theoretical case for the magnet effect of price limits in a model based on Kyle (1985), opening up a line of empirical scrutiny.
Third is allowance for investors to engage in intraday trading, so as to hedge against higher investment risks associated with the increase of daily price limit.
The Chinese government imposed 10 percent price limits upward and downward on daily stock prices in order to stabilize volatile market movements related to China's stock markets being considered highly speculative.
Chief executive Colin Matthews said: "We apologise unreservedly to our customers for poor internal processes and systems of control which unintentionally led to price limits for the period 2005-2010 being set too high.
However, we shall consider carefully all the comments which we receive before reaching conclusions on our final price limits in December.
When OFWAT announced the proposed price increases in May it said that although increases were inevitable, it would ensure that price limits were no higher than necessary to update aging infrastructure.
We have worked hard to ensure the price limits are no higher than they need to be.
This study provides additional empirical evidence on effects of price limits on stock price volatility in emerging markets using data from the Johannesburg, South Africa (JSE), stock exchange.
As to price limits, however, the law provides a ceiling of 15% above SONYMA's standard.
Circuit breakers are often triggered by specified price movements and include the imposition of price limits in futures markets, the New York Stock Exchange's (NYSE) Rule 80A which restricts the use of the NYSE's Designated Order Turnaround System for index arbitrage orders and trading halts in stock and futures markets.
We were able to document the water companies' performance during the first year of the price limits set in 1994.