Page 26 - Futures Money Machine-Study Session #3
P. 26
Understanding Futures
Limit Moves Continued…
• “Limit Up”: This is the maximum amount by which the price of a
commodity futures contract may advance in one trading day. It's the
top price a contract can be traded before an exchange would stop its
trading. Some markets will allow the contracts to resume trading if
the price moves away from the day's limit.
• “Limit Down”: Just the opposite of limit up, this is the maximum
amount by which the price of a commodity futures contract may
decline in one trading day. So it's the lowest amount a commodity
can be traded before an exchange halts trading. And also like limit up,
if the contract prices do go higher away from their limit down,
exchanges will allow trading to resume.
