Limit Move


DEFINITION of 'Limit Move'

The largest amount of change that the price of a commodity futures contract is allowed to undergo. It is not possible to trade a futures contract at a price either above or below the futures contract price after a limit move. The limit price is set by the exchange on which the futures contract trades.


For example, assume that a wheat futures contract is selling for $3.50, and has a limit of $4. If a severe drought drastically reduces the supply or wheat, the futures price will rise to the $4 limit level, but no higher. This is referred to as a lock limit.

Limit moves are set in place to limit the risk (volatility) in futures price movements.

  1. Limit Up

    The maximum amount by which the price of a commodity futures ...
  2. Lock Limit

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  3. Daily Trading Limit

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  4. Locked Market

    A market in which a stock's bid and ask prices are identical. ...
  5. Limit Down

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  6. Futures

    A financial contract obligating the buyer to purchase an asset ...
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