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Limit Up

What does Limit Up mean?

The maximum price advance 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 Up

In futures markets, Limit up and Limit down are devises that major exchanges use to stop manipulation or extreme volatility in the markets. These are the upper and lower limits within which can be traded before an exchange halts trading. The exchange sets these limits as percentage of the previous day closing. The percentage varies from commodity to commodity.

For example, CME Group applies 7%, 13%, and 20% price limits to the futures fixing price during day hours and 5% overnight.

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