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Limit Down

The maximum amount by which the price of a commodity futures contract may decline in one trading day. Limit down also refers to the maximum decline permitted in individual stocks on certain exchanges before trading curbs kick in. The limit is generally set as a percentage of the market price of the futures or stock, and occasionally as a dollar amount. These limits were introduced to counter unusual market volatility and prevent panic-driven selling.

Read more: Limit Down Definition | Investopedia

See also Limit Up and LULD

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Limit Up steve2222 Terms (Glossary) 0 December 20th, 2015 07:43 AM

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