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A price limit is the maximum price range permitted for a futures contract in each trading session. When markets hit the price limit, different actions occur depending on the product being traded. Markets may temporarily halt until price limits can be expanded, remain in a limit condition, or stop trading for the day based on regulatory rules.
This Prohibited Conduct is enforced in the following accounts: Express Funded Account™, Legacy Funded Account, Pro Account®, & Premium Funded Account®.
|Tip: CME Price Limits are subject to change, so we recommend checking in on the CME website linked above regularly.|
Below is an example of Price Limits for the ESM0 contract during the 5/14/2020 trading session. They are based on the Settlement Price from 5/13/2020, which was 2814.00.
Equity Products ES, MES, NQ, MNQ, RTY, M2K, YM, and MYM overnight price limits have expanded from 5% to 7%.
One of the easiest ways to ensure you are not trading within 2% of any Price Limit would be to watch the % Net Change for the contract you are participating in via your trading platform quote board.
Another method to find your limits would be to calculate them based on the Settlement Price. You would need to know the previous day’s Settlement Price along with the % up and/or down that triggers the next Price Limit based on the time you are trading.
The above image shows a hypothetical visual for ES with a 7% Price Limit. From the previous day's settlement, trading is allowed until ES reaches -5% net change on the day (2% away from the 7% Price Limit). If the net change on the day for ES has exceeded a 5% move, then no trading is allowed.
Your trading platform’s Quote Board/Radar Screen not only displays the “Net Change” on the day as prices move, but it can also display “Net Change” as a percentage or “% Net Change.” If the “% Net Change” is not currently displayed on your Quote Board, simply add that column to display how close your product is to the Price Limit.
In an effort to protect our firm and our traders, we will not allow market participation when a product is trading within 2% of a Price Limit. This Prohibited Conduct is enforced in the following accounts: Express Funded Account™, Legacy Funded Account, Pro Account®, & Premium Funded Account®.
In addition, all speculators assuming risk in a market should know that market intimately. It is important to be aware of the Contract Specifications and Price Limits for any product you trade.
For more information about your favorite products, please reference the CME Group website. Click on your product from the home page for detailed information.