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Limit Down

What does Limit Down mean?

The maximum price decline from the previous day's settlement price permitted during one trading session. This is fixed by the rules of the futures exchange.

Futures Knowledge Explains Limit Down

In futures markets, the exchange fixes the limit up and limit down to stop manipulation or extreme volatility in the markets. The upper and lower limits gives the price range within which trading is to be done, otherwise the exchange halts trading. The exchange sets these limits for different commodities as percentage of the previous day closing.

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