quite a few chums inquire with me as to the meaning of limit down.
The meaning of limit down is the maximum amount by which the price of a commodity futures contract may decline in one trading day.
Some markets close trading of contracts when the limit down is reached; others allow trading to resume if the price moves away from the day's limit. If there is a major event affecting the market's sentiment toward a particular commodity, it may take several trading days before the contract price fully reflects this change. On each trading day, the trading limit will be reached before the market's equilibrium contract price is met.
Posted 1 month ago
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