Limit Up / Limit Down
Exchange-imposed maximum daily price move for a futures contract. Trading halts or is restricted when the price hits the limit.
Limit up and limit down are price thresholds set by exchanges beyond which a futures contract cannot move (or, in some markets, trading is halted) within a single session. They act as circuit breakers to prevent disorderly markets during extreme events.
For CME equity index futures, the limits are tiered: a 7% drop in ES from the prior settlement triggers a 15-minute halt; a 13% drop triggers another halt; a 20% drop halts trading for the rest of the session. These align with the S&P 500 cash market circuit breakers.
Commodity futures like CL have fixed absolute limits (e.g., $10/barrel per session for crude). If crude reaches the limit, it may trade at that limit price but cannot go beyond — causing the bid to disappear at the limit in a lock-down scenario.
Related Terms
Daily Settlement Price
The official closing price established by the exchange each session, used to calculate mark-to-market P&L and margin requirements.
IntermediateFutures Contract
A standardized, exchange-traded agreement to buy or sell an asset at a fixed price on a set future date, settled daily via mark-to-market.
BeginnerOpen Interest
The total number of outstanding futures contracts that have not been settled, delivered, or offset. A measure of market participation.
Intermediate