In the futures exchange, there will be a unified rule, just like the rise and fall of the domestic stock market. Determining the maximum decline of futures trading varieties on the same day can be called futures price limit. Several points of the daily limit are often based on the settlement price of one day. When the price drops by about 5%, it will reach the daily limit.

The price limit system of futures market is similar to that of domestic stock market, but it is very different. Although it is also a price limit, the price limit of futures is based on the settlement price of the previous trading day multiplied by 4%, and most of them will be around 3%-6%, while the price limit of stock index futures is similar to that of the stock market, which is 10%.

Extended data:

It is also common for futures markets to have daily limit. Compared with the daily limit of the domestic stock market, there is still a chance to close the position after the futures investment reaches the daily limit. After a comprehensive analysis of the futures market, investors will gradually close their positions if they feel that there is no room for the variety to rise, or there is a short signal.

There are two kinds of liquidation at this time, hedging liquidation and forced liquidation. Among them, hedging liquidation is to sell or buy futures contracts that have been bought or sold before, which is more active. However, forced liquidation is often a compulsory operation for investors by futures exchanges due to insufficient margin.

References:

China Enterprise Network-What does the daily limit of futures mean? What should I do after the limit operation?