@ClearTrades

https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude_quotes_globex.html

Hi/Low Limit

Does the limit price guarantee you that is your maximum loss exposure though?

What I mean is, for example, say you have 4 CL contracts and you are in at the last settled price, and you have your stop loss set, but the market does a massive 6 point move in one trade and the market goes to limit price. 4000 barrels * $6 = $24,000 loss.

Is $24,000 really your absolute maximum loss exposure? Or can you lose more?

I thought if you didn't get out of the trade yet, once market opens again you are right back into possibly losing more until your stop actually gets filled. And in this type of situation, does it make a difference if your stop loss was entered as a good til canceled, or good til market close?
Would good til canceled give more protection, in the even it limits and closes, if your stop is not good until canceled would your stop loss would be canceled in this situation?

In the theoretical example you outline you can lose more. $6 is only the point at which they stop the market for a period of time. Then it reopens and could move limit again and again before you ever get a chance to move out. Highly unlikely scenario, but theoretically possible. I have heard of some of the ags or meat futures having limit moves multiple days in a row though.

SMCJB 

In the theoretical example you outline you can lose more. $6 is only the point at which they stop the market for a period of time. Then it reopens and could move limit again and again before you ever get a chance to move out. Highly unlikely scenario, but theoretically possible. I have heard of some of the ags or meat futures having limit moves multiple days in a row though.

What kind of doomsday scenario would have to take place for CL to be caught in such a loop though?

I've traded it for almost 3 years, the worst unexpected scenario I witnessed was the one reported on the 14th Feb, which was 46 ticks and then came back up.

I asked another couple of CL traders who traded longer than me and they never experienced anything so severe.

SMCJB, what is your experience on Crude anomalies?

SMCJB 

In the theoretical example you outline you can lose more. $6 is only the point at which they stop the market for a period of time. Then it reopens and could move limit again and again before you ever get a chance to move out. Highly unlikely scenario, but theoretically possible. I have heard of some of the ags or meat futures having limit moves multiple days in a row though.

this may be wrong but I thought they would try and keep the market closed until the event is over.. if its news related or such. I also thought you couldn't place pending orders or anything during the close to help prevent the continuation of the "black swan" ... please correct me if i am wrong but that's what i thought.

-p

MiniP 

this may be wrong but I thought they would try and keep the market closed until the event is over.. if its news related or such. I also thought you couldn't place pending orders or anything during the close to help prevent the continuation of the "black swan" ... please correct me if i am wrong but that's what i thought.

No Sir.

RULE 589 - SPECIAL PRICE FLUCTUATION LIMITS
https://www.cmegroup.com/content/dam/cmegroup/rulebook/CME/I/5/5.pdf

In essence upon a limit move ($6/bbl) the market is paused for 2 mins (its actually more complicated, read the rule) and then reopened with a new $12 max move. If that is hit it pauses again for 2 mins and then reopens with a new $18 max move and then one final time with a $24 max move.

I can't remember multiple pauses in CL but I know the market has had moves >$12 so it must have happened. I can remember it happening multiple times in NG though.

Crude Oil Margins dropping (slightly) effective today.
Member Margin for Tier 1, Apr'19, dropping $200 from $3900 to $3700.
Non-member rates will be 110% of that.

SMCJB 

No Sir. RULE 589 - SPECIAL PRICE FLUCTUATION LIMITS https://www.cmegroup.com/content/dam/cmegroup/rulebook/CME/I/5/5.pdf In essence upon a limit move ($6/bbl) the market is paused for 2 mins (its actually more complicated, read the rule) and then reopened with a new $12 max move. If that is hit it pauses again for 2 mins and then reopens with a new $18 max move and then one final time with a $24 max move. I can't remember multiple pauses in CL but I know the market has had moves >$12 so it must have happened. I can remember it happening multiple times in NG though.

thank you!
learned something new today.

-P

MiniP 

thank you! learned something new today. -P

Just hedge on the ES in that case. IB charges no margin for a hedge like that and liquidity should be good enough to do that.

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Actually I believe the real way to get around it is to trade options. I believe they don't have the same circuit breakers that futures do so even if futures are locked on a limit move the options continue to trade.