How price limits and circuit breakers work in today's markets
CME Group has several measures in place to ensure that our markets continue to work in an efficient and orderly manner during volatile market conditions. By establishing price fluctuation limits specific to each product, the exchange can help restrict a market from moving too far or too fast in a specific period of time.
This page provides examples of price limits, circuit breakers, and other tools that CME Group uses today.
What are price limits?
Price limits represent the maximum price range permitted for a futures contract in each trading session. Price limits vary from product to product, as does what happens when a price limit is hit. Some markets may temporarily halt until price limits can be expanded or trading may be stopped for the day based on each exchange’s rulebook (grain futures have daily hard limits, for example).
Equity product price limits and circuit breakers
Our U.S. Equity futures markets have a range of automated safeguards in place – some of which are coordinated with cash equity markets.
CME Group U.S. Equity futures have 7% price limits overnight and remain open for trading at that limit. If markets reach 7% up or down during the overnight session, they remain open but can only trade up to those price limits. Further, Dynamic Circuit Breakers will be in effect with a width of 3.5%. If a contract market moves beyond +/- 3.5% within an hour during the overnight session, trading will be paused for two minutes.
Daytime trading employs market-wide circuit breakers, a kind of price limit that halts trading for a period of time to help the market reset. CME Group U.S. Equity futures markets are coordinated with stock circuit breakers at market 7%, 13%, and 20%. The 7% and 13% circuit breakers are each followed by 10-minute trading halts; if the 20% level is reached, the market closes for the trading day. Learn more below:
Energy product circuit breakers
Our Energy markets have dynamic circuit breakers, which means the range in which prices can move is reset continuously on a rolling 60-minute lookback window. If markets move +/- 10% in that time, a 2-minute halt is initiated.
Metal product circuit breakers
Our Metal markets have dynamic circuit breakers, which means the range in which prices can move is reset continuously on a rolling 60-minute lookback window. If markets move +/- 10% in that time, a 2-minute halt is initiated.
Interest Rate product circuit breakers
Our Interest Rate markets have dynamic circuit breakers, which means the range in which prices can move is reset continuously on a rolling 60-minute lookback window. If markets move a defined value in that time, a two-minute halt is initiated. The defined value can be found on the price limits page.
Cryptocurrency product circuit breakers
Our Cryptocurrency markets have dynamic circuit breakers, which means the range in which prices can move is reset continuously on a rolling 60-minute lookback window. If markets move +/- 10% in that time, a 2-minute halt is initiated.
Recent daily price limit and circuit breaker changes
View updates to price limits and circuit breakers by market and/or individual contract.
View SER-9114: amendments to Cryptocurrency price limits
View SER-8658: amendments to overnight trading hours price limit and circuit breaker
What are circuit breakers?
Circuit breakers are a series of price limits that, when reached, pause a market for a particular period of time for markets to reset. There are two kinds of circuit breakers in CME Group markets:
Traditional circuit breakers
Traditional circuit breakers are a series of price limits above and below a reference price (usually settlement) for certain CME Group products. Once a circuit breaker is triggered, the next level of circuit breaker comes into effect. Products with traditional circuit breakers, like equity markets, are divided into primary contracts and associated contracts.
- Primary contracts: The CME Global Command Center (GCC) designates the lead month for the primary contract.
- Associated contracts: When primary contracts trigger a circuit breaker event, all associated contracts follow the behavior of the primary contract. Associated contracts can also have their own circuit breaker events, but those events do not influence other contracts like primary contracts do.
Dynamic circuit breakers
Dynamic circuit breakers (DCBs) are similar to traditional circuit breakers but move with the market throughout the day. Within a specific time interval, DCBs define an upper and lower limit of how far an instrument is allowed to move in a specific time interval, usually an hour.
Each product has its own assigned value used to calculate the circuit breaker level, typically a percentage of its previous settlement price.
What is velocity logic?
Velocity logic monitors potential significant price movements in extremely small time increments on CME Globex. It works in conjunction with price banding to preserve the integrity of our markets.
Whereas price banding monitors futures price movements that would go too far, velocity logic monitors futures price movements that would go too far, too fast. It’s calculated using the highest and lowest prices within a predetermined lookback window.
If a velocity logic violation occurs, the futures market is temporarily suspended, as are all associated options markets.
What is price banding?
Price banding is a similar mechanism to price limits which rejects orders outside a given range, or band, to maintain orderly markets in futures and options markets whether there is high volatility or not. Bands are calculated dynamically for each product based on the last price, plus or minus a fixed value. If markets quickly move in one direction, the price bands dynamically adjust to accommodate new trading ranges.
Contact us
CME Global Command Center
The CME Global Command Center provides customer support 24 hours a day, beginning at 14:00 Sunday through 16:30 Friday, Central Time:
- United States: +1 800 438 8616
- Europe: +44 20 7623 4747
- Asia: +65 6532 5010
For general, non-production issues, email the GCC.
For more information, visit the GCC support page.
Clearing
The contacts listed below provide support on clearing-related issues:
OTC support
- United States: +1 312 338 7112
- Europe: +44 20 3379 3199
- Asia: +65 6593 5592
Futures and options support
- United States: +1 312 207 2525
- Europe: +44 20 3379 3198
- Asia: +65 6593 5591
For all clearing inquiries, email Clearing Client Services.
Contact us
Visit the CME Group Contact Us page to find global contact information related to specific product or service for which you need support.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
