The implementation of price limit is that the stock exchange regulates the fluctuation range of securities trading price on the basis of the closing price of the previous trading day in order to curb excessive speculation and prevent excessive ups and downs of the market.
The price limit system means that the transaction price of a futures contract in a trading day cannot be higher or lower than a certain fluctuation range based on the settlement price of the contract in the previous trading day, and the quotation exceeding this range will be regarded as invalid and cannot be traded.
The price limit system implemented in China has the characteristics of non-stop, that is, after the stock price or futures contract price reaches the price limit, the trading is not restricted, and the trading within the price limit can still be carried out until the market closes on the same day.