This means that futures daily limit can also be bought and sold, and those sold can be sold quickly, but those who want to buy should queue up.
The price limit system is to prevent the stock market price from skyrocketing and plunging, which will affect the normal operation of the market. The securities market management institution shall stipulate the upper and lower limits of the daily stock trading price. That is, when the daily market price reaches the upper or lower limit, no more ups and downs are allowed. This term is called "price limit". The highest price limit of the market on that day is called "daily limit" and the lowest price limit is called "daily limit".
The combination of price limit system and margin system plays a very important role in ensuring the operation of futures market, stabilizing the order of futures market and giving full play to the functions of futures market.
The price limit system creates necessary conditions for the daily risk control of exchanges, member units and customers. The price limit board locks the maximum floating profit and loss and closing profit and loss that may be added by customers and member units every trading day, which provides an objective and accurate basis for the exchange and member units to set the initial margin level and maintain the margin level. So that the margin system of futures trading can be effectively implemented. Under normal circumstances, the margin charged by the futures exchange to its members is greater than the amount of losses that may occur within the fluctuation range, so as to ensure that the futures price will not be overdrawn when it reaches the upper limit of fluctuation on that day.
The implementation of the price limit system can effectively slow down and restrain the impact of unexpected events and excessive speculation on futures prices, stabilize the market for a certain period of time, fully resolve the impact of these factors on the market, prevent the price from soaring and plunging, and maintain the normal market order.
The price limit system makes the futures price run on a more rational track and makes the futures market play a better role in price discovery. The interaction between market supply and demand and price should be a gradual process, but futures prices are sometimes too sensitive to market signals and news. By implementing the price limit system, the realization time of futures fluctuation range can be delayed, thus giving full play to the price discovery function of futures market. In the actual trading process, when one trading day closes with price limit, the price volatility of the next trading day tends to shrink or even reverse, which fully illustrates the above functions of the price limit system.
When there are abnormal phenomena such as excessive speculation and market manipulation, adjusting the range of price limit is often an important means for exchanges to control risks. For example, when there is a unilateral market with no continuous trading volume in the delivery month, the price limit can be reduced by appropriately reducing the range of the price limit, so as to control the losses of exchanges, member units and traders in a relatively small range.