Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
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More on LIMIT Moves: Wheat
By John Thorpe, Senior Broker
Futures contract limit moves during extreme volatility….. rules are different for each commodity that does have a hard daily price limit. not all futures contracts have daily price limits
. Here is a discussion from the CME of Daily Price limits Product Examples for Daily Price (Trading) Limits – Electronic Platform Information Console – Confluence (cmegroup.com)
a current list of markets where limits are enabled is here Price Limits: Ags, Energy, Metals, Equity Index (cmegroup.com)
the reason we draw your attention to this is the current state of the Wheat market
with the first 2 months in the Chicago Soft contracts and of the KC Hard red winter contracts. Limit markets are also known as Limit Bid or limit offer markets where there are Bidders or offerors “jumping into the Pool” clamoring to get long or short.. we refer to the excessive bids or offers as “the Pool” when exterior pressures create the perception of shortage of a commodity, as is the case for wheat this week, markets make limit moves. near today’s close I took this snapshot of the number of unfulfilled bids in the pool is seen in the bid size column :
The Wheat market
will re-open tonight @ 8:00 PM EST if the exchange moves to a .75 cent limit the dollar value of a limit move is $3750.00 per contract.
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Posted in: Future Trading News | Grain Futures