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. Daily Trading Limit

    The maximum gain or loss on a derivative contract, such as options ...
  2. Limit Move

    The largest amount of change that the price of a commodity futures ...
  3. Limit Down

    The maximum amount by which the price of a commodity futures ...
  4. Limit Up

    The maximum amount by which the price of a commodity futures ...
  5. Sensitivity Analysis

    Sensitivity analysis is a technique used to determine how different ...
  6. Position Limit

    The highest number of options or futures contracts an investor ...
Related Articles
  1. Professionals

    The Futures Trade Process

    CFA Level 1 - The Futures Trade Process. Learn the trading process of futures contracts and how they are marked to market. Covers price limits and how they affect futures pricing.
  2. Professionals

    Variable Contracts

    FINRA Series 6: Section 11 Variable Contracts
  3. Investing Basics

    How To Invest In Commodities

    Find out which futures, options or funds will be your perfect commodity portfolio fit.
  4. Investing

    What's a Sensitivity Analysis?

    Sensitivity analysis is used in financial modeling to determine how one variable (the target variable) may be affected by changes in another variable (the input variable).
  5. Investing Basics

    Understanding the Commodity Market

    There are currently 50 physical and virtual commodity markets worldwide where almost 100 primary commodities trade through the exchange of ownership rights.
  6. Professionals

    General Futures Terminology

    General Futures Terminology
  7. Professionals

    Variable Contracts

    FINRA/NASAA Series 26: Section 3 - Variable Contracts
  8. Economics

    Understanding Regression

    Regression is a statistical analysis that attempts to predict the effect of one or more variables on another variable.
  9. Financial Advisors

    Variable Annuities: The Pros and Cons

    Variable annuities are one of the most complicated financial instruments. Here is an in depth look at their pros and cons.
  10. Professionals

    Price Limits

    Price Limits
RELATED FAQS
  1. What variables are most important when making a prediction through sensitivity analysis?

    Explore sensitivity analysis and how this method considers different variables to determine a course of action based on statistical ... Read Answer >>
  2. Who sets the price of commodities?

    Commodities are extremely important as they are essential factors in the production of other goods. A wide of array of commodities ... Read Answer >>
  3. How do I set a strike price for a future?

    Find out why futures contracts don't have set strike prices like options or other derivatives, even though price change limits ... Read Answer >>
  4. Can commodities also be investments?

    Learn about the commodities trade and several different ways investors may participate. Find out about some of the advantages ... Read Answer >>
  5. How are commodity spot prices different than futures prices?

    Find out more about commodity spot and futures prices, how to calculate a commodity's futures price, and the differences ... Read Answer >>
  6. How can electricity be traded as a commodity by an individual investor?

    Learn the characteristics unique to electricity trading as a commodity and how investors can trade electricity futures on ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center