Daily price limit

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.

Daily Trading Limit

The maximum amount of gain or loss that can occur on a particular security or, more commonly, derivative on a trading day. Derivatives, currencies, and commodities can be extremely volatile investments. In order to prevent this volatility from spiraling out of control, options and futures exchanges enact daily trading limits stating that a security cannot rise or fall more than a certain percent in a given trading day. If a security reaches the daily trading limit, trading on that security is suspended for the remainder of the day. This is called a locked market. See also: Limit up, Limit down.
References in periodicals archive ?
The CSX originally set its daily price limit at a relatively low 5 percent in an effort to maintain stability on its freshly established trading platform and avoid radical changes in the market.
Soleil said the daily price limit at other stock exchanges in the region have been higher than the original CSX limit, with Thailand's set at 30 percent while both Vietnam and Laos have theirs set at 10 percent.
The first one will be the relaxation of the daily price limit from the present 7%, to 10%.
No wonder ICBC, Agricultural Bank of China and Bank of China all fell by the daily price limit of 10 per cent.
Shortly after, in October 2008, at the peak of the global financial crises, the daily price limit was made symmetrical at 5 per cent at both the minimum and maximum thresholds.
We then examine the impact of the imposition of the asymmetric daily price limit of maximum downward movement of 1 per cent while retaining 5 per cent limit on upward movement in August 2008.
10) The day on which the IPO firm's closing price first falls within the daily price limit rather than the offering day is taken as the cutoff point.
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.
Each commodity has a daily price limit, and once that limit is reached trading stops for the day.
Prices climbed to a peak on May 21, the day after the daily price limit rule was lifted, and then declined so that by October prices were back to the beginning of year price levels.
First, we examine the economic role of daily price limits in futures markets in an effort to isolate or characterize the basic tradeoff(s) involved in a rational daily price limit policy.
However, a similar drop in indices in the Middle Eastern markets are unlikely due to the daily price limits set by most exchanges and [which] act as a intraday safety net.