Upcoming elections fear, COVID resurge and other factors really helped spike up volatility.
Dow Jones is sitting on a MAJOR and IMPORTANT support level. Chart below.
*While I have no idea were the market is going from day to day, minute to minute, week to week etc. I feel the following may help….
*Expect the unexpected…
* Have an idea of what you are looking to do, keep in mind possible risk and have a game plan. Now more than ever, plan your trade and than trade your plan!
* Think money management, hedging risk while you are still trying to figure out how to profit.
- Try to use preset brackets/ automated stops and limits etc. if you are able to with your software.
* Know what is going on, reports, current margins, current limits and more.
*Trade smaller. The bands are much larger. Watch the VIX. MICROS and smaller sized contracts like mini Silver and mini crude are good alternatives.
* DO NOT assume anything…if you are not sure,
contact us and we will try our best to assist with the combined, vast experience we have here as a team.
* Wash hands, take this seriously and do your best to stay healthy….
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I’ve received some questions about the price limits or circuit breakers we have seen mostly in stock index futures. Hopefully this explains things a bit better:
A price limit is the maximum price range permitted for a futures contract in each trading session. When markets hit the price limit, different actions can occur depending on the product being traded. Markets may temporarily halt until price limits can be expanded, they may remain in a limit condition or they may stop trading for the day, based on regulatory rules.
This is for Stock Index futures but keep in mind MANY other markets are experiencing LARGE swings and moves.
Overnight limits (5:00 P.M. – 8:30 A.M., Central Time): the futures contract is limited to a 7% price move up or a 7% price move down, based on the futures contract’s prior day’s settlement price (3:15 P.M., Central Time).
If PRICE LIMITS hit 7% up or down and trading will cease until the NYSE cash market opens at 8:30am Central Time.
This is for Stock Index futures but keep in mind MANY other markets are experiencing LARGE swings and moves.
Overnight limits (5:00 P.M. – 8:30 A.M., Central Time): the futures contract is limited to a 7% price move up or a 7% price move down, based on the futures contract’s prior day’s settlement price (3:15 P.M., Central Time).
Further, if a contract market moves beyond +/- 3.5% within an hour during the overnight session, trading will be paused for two minutes.
If PRICE LIMITS hit 7% up or down and trading will cease until the NYSE cash market opens at 8:30am Central Time.
This applies to the main stock index futures contracts available, such as the ES, MES, NQ, etc.
What is so dangerous you may ask?
If you are long an ES during the night session and the market is limit down (7%) you can NOT get out. There is a chance that when the market opens up at 8:30 AM CDT that the market will then go down the 13% limit without you being able to exit. That means that on certain situations you can lose MORE than you have in your account.
If you don’t understand how the circuit breakers/ price limits work…make sure you call us and talk to a broker at + 1 310 859 9572
This only applies for the overnight session ending at 8:30 A.M. Central Time. At that point, a new set of rules kick in ONLY to the downside.
-7% Trading Halt 15 mins
-13% Trading Halt 15 mins
-20% Closed for rest of day
