Specifically, it is a mechanism to set a fuse price for the contract before the contract reaches the price limit, so that the contract trading quotation can only be traded within this price range for a period of time.
Expanding information is conducive to eliminating the decline in liquidity caused by outdated prices in the futures market. In the unilateral market with abnormal fluctuation of stock index futures, the normal display of the market will be delayed due to the obstruction of a large number of buying (or selling), resulting in outdated prices. At this time, the price people see is actually the last moment price, at which the transaction must not be closed;
A large number of non-trading orders continue to enter the trading system, which will cause more serious transaction congestion and make the data display more backward. The fuse cycle is 10 minute, which can eliminate the instruction blocking phenomenon of the trading system, eliminate outdated prices and ensure smooth trading.
Baidu encyclopedia-fuse mechanism