Variable Price Limit

DEFINITION of 'Variable Price Limit'

A schedule of price variations above or below the accepted limits determined by the commodities exchanges for any one trading day.

BREAKING DOWN 'Variable Price Limit'

Variable price limits allow contracts to trade past their maximum daily changes. Exchanges determine whether a futures contract be assigned a variable price limit as it is generally used for commodities with high transaction volumes.

RELATED TERMS
  1. Chicago Board Of Trade - CBOT

    A commodity exchange established in 1848 that today trades in ...
  2. Chicago Board Options Exchange ...

    Founded in 1973, the CBOE is an exchange that focuses on options ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  4. Lock Limit

    Commonly associated with the futures market, a lock limit occurs ...
  5. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  6. Volume Of Trade

    The total quantity of futures contracts bought and sold during ...
Related Articles
  1. Mutual Funds & ETFs

    Modernize Your Portfolio With ETF Futures

    Gain access to premier, highly liquid ETFs with lower capital requirements.
  2. Active Trading

    Commodities: The Portfolio Hedge

    These diverse asset classes can provide downside protection and upside potential. Find out how to use them.
  3. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  4. Mutual Funds & ETFs

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  5. Options & Futures

    Commodities That Move The Markets

    Find out how the everyday items you use can affect your investments.
  6. Active Trading

    Timing Trades With The Commodity Channel Index

    We introduce how to use this oscillator, which identifies cyclical trends, for determining buy and sell points.
  7. Options & Futures

    What Does Quadruple Witching Mean?

    In a financial context, quadruple witching refers to the day on which contracts for stock index futures, index options, and single stock futures expire.
  8. Options & Futures

    4 Equity Derivatives And How They Work

    Equity derivatives offer retail investors opportunities to benefit from an underlying security without owning the security itself.
  9. Options & Futures

    Five Advantages of Futures Over Options

    Futures have a number of advantages over options such as fixed upfront trading costs, lack of time decay and liquidity.
  10. Options & Futures

    Contango Versus Normal Backwardation

    It’s important for both hedgers and speculators to know whether the commodity futures markets are in contango or normal backwardation.
RELATED FAQS
  1. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. Can mutual funds invest in options and futures? (RYMBX, GATEX)

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  4. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  5. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  6. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center