Futures Price Limits Explained: Limit Up, Limit Down and Trading Halts

Four times in March 2020, trading on US stock exchanges came to a stop. On March 9, 12, 16, and 18, the S&P 500 fell 7%, which triggered a 15-minute trading halt each time.

Futures markets also have rules that control how far prices can rise or fall during certain trading hours.

These price limits, set by exchanges such as CME Group, can affect when you enter or exit a trade, whether your stop order gets filled, and what happens when trading resumes.

Understanding these rules is important before placing a futures trade. This guide explains limit up, limit down, circuit breakers, and trading halts, with practical examples of how each can affect your positions.

What These Limits Mean and Why Exchanges Use Them

Price limits control how high or low a futures contract can trade during a set period. Exchanges use them to stop prices from moving too far or too fast. This gives buyers and sellers more time to react when the market moves sharply.

There are two main ways these rules work. A price limit stops prices from moving beyond a set level, while a circuit breaker temporarily stops trading when certain conditions are met.

Trading may resume after a short break or remain restricted, depending on the market.

Each futures product has different rules. For instance, CME limits for corn futures differ from those for E-mini S&P 500 futures. You can find the rules for each market on the CME Group website.

Reading the Upside and Downside Boundaries

Limit up is the highest price a futures contract can reach during a set period, while limit down is the lowest.

Prices cannot move beyond these levels until the exchange allows it. When a contract reaches its lowest allowed price, sellers may struggle to find buyers.

For example, a contract closes at 100, and the exchange sets a 5% daily limit. The next day's price can move between 95 and 105. If bad news causes the price to fall to 95, it cannot drop any further under that limit. 

• You may want to sell, but your order might not go through because there are too few buyers.

A CME halt is different because trading stops completely for a short period. Trading may then resume with new price limits, depending on the contract's rules. Some futures markets use price limits, others use trading halts, and some use both.

How CME Group Sets Limits by Product

CME price limits work differently depending on the futures market. There are three main types:

• Fixed daily limits: Markets such as corn, soybeans, and livestock have set daily limits. For example, corn futures have a limit of $0.30 per bushel, which can increase to $0.45. Soybean futures have a limit of $0.85 per bushel, which can increase to $1.30. These limits can change, so check the CME price limits page for updates.

• Percentage limits: Stock index futures, such as the E-mini S&P 500, use percentage limits based on a price calculated from the previous trading day. These limits control how far prices can move, as explained in the next section.

• Dynamic circuit breakers: Markets such as oil, gold, and interest rate futures have limits that change as prices move. CME checks price movements over a period, usually 60 minutes. If prices move too far during that time, trading may stop for two minutes.

Before trading a new futures contract, check its limits on the CME website. You can also read our guide to the best futures to day trade to learn about popular contracts and their trading volume.

Equity Index Futures: Three Levels of Protection

Stock index futures use a price from the previous trading day to set their limits. CME calculates this average using futures trading prices and volumes between 2:59:30 and 3:00 p.m. CT.

From 8:30 a.m. to 2:25 p.m. CT, CME circuit breakers have three levels: 7%, 13%, and 20% drops. During these hours, price limits only restrict how far prices can fall.

For E-mini S&P 500 (ES) and Micro E-mini S&P 500 (MES) futures, trading stops when the S&P 500 Index falls 7% or 13% from its previous closing price during regular market hours. A CME market halt at these levels also affects other US stock index futures and options. 

CME futures can resume after 10 minutes with a lower price limit, while stocks remain paused for at least 15 minutes. If the index falls 20%, trading ends for the day. Futures reopen at 5:00 p.m. CT before the next business day.

Other stock index futures, including Nasdaq-100 contracts, have an additional rule. If the contract reaches its 7% lower limit before 2:25 p.m. CT, CME watches the market for two minutes.

If sellers are still unable to find enough buyers at that price, a CME futures halt stops trading for another two minutes. Trading then resumes with the lower limit increased to 13%.

Here is how a Level 1 halt works: 

The S&P 500 Index falls 7%, causing trading to stop. When futures trading resumes, prices can fall as far as 13% below the reference price.

Another sharp fall could trigger Level 2, followed by Level 3 at 20%. These pauses give the market time to settle, but prices can continue falling afterwards.

The rules change after 3:00 p.m. CT. Between 3:00 and 4:00 p.m. CT, and again from 5:00 p.m. to 8:30 a.m. CT, futures generally cannot rise or fall more than 7% from the set reference price.

The earlier 20% daily lower limit also applies during the 3:00 to 4:00 p.m. period. A contract at limit down cannot trade below its lowest allowed price.

For example, an E-mini S&P 500 contract has a reference price of 6,000. Its three lower levels would be 5,580 (7%), 5,220 (13%), and 4,800 (20%).

A fall from 6,000 to 5,580 equals 420 points. If you bought at 6,000, that would mean a $21,000 loss on one ES contract or $2,100 on one MES contract, before trading costs.

Stocks also have trading halts, although their rules differ. Read our guide to futures vs stocks for day trading to understand how both markets work.

Dynamic Circuit Breakers for Energy, Metals, and Rates

Dynamic circuit breakers check how much futures prices move within a set period, usually 60 minutes. In markets such as crude oil and gold, a 10% rise or fall within one hour causes trading to stop for two minutes. These CME circuit breakers help slow down sudden price movements.

After a CME trading halt, trading resumes, and a new 60-minute period begins. Interest rate futures use a similar system, but the price change needed to stop trading depends on the contract. These CME limits change as market prices move, rather than staying at the same level all day.

Stock index futures also have a 3.5% rule outside regular US stock market hours. If prices rise or fall by more than 3.5% within one hour, trading stops for two minutes. Trading can then resume, even if prices continue moving sharply.

What Happens to Your Orders When Trading Stops

When a futures contract reaches its price limit, you cannot place orders beyond that level. For example, if the lowest allowed price is 5,000, an order to sell at 4,990 will be rejected. If the exchange lowers the limit to 4,900, you can place a new order at 4,990.

During a CME futures halt, no trades can go through until trading resumes. Stop orders also have limits. A stop-loss order does not guarantee that you will exit at your chosen price.

If prices move too quickly or there are no buyers, your order may fill at a worse price or remain unfilled.

The same problem can happen when prices rise. 

• If you sell a contract and the market reaches its highest allowed price, you may struggle to buy it back. Your losses can increase while you wait for trading to resume or the limits to change.

After a CME trading halt, prices may open much higher or lower than before the pause.

This makes stop orders less reliable during sharp market moves. Always choose a position size that allows you to manage possible losses, even when your stop order does not fill.

Where This Meets Your Funded Account

At Goat Funded Futures (GFF), you can trade ES and NQ stock index futures, CL crude oil, GC gold, and 6E euro futures.

You trade on simulated accounts using live market prices, with platforms such as NinjaTrader, Tradovate, TradingView, and ATAS. This means CME price limits still affect how your trades work, even though your account uses simulated money.

Your GFF plan has extra rules to control losses. A daily loss limit sets the maximum you can lose in a day.

If prices move past your stop-loss level, your order may fill at a worse price and cause a bigger loss. There is also a maximum loss limit, which sets the total amount your account can lose.

Some plans use an intraday trailing drawdown. This means your loss limit moves up as your account reaches new highs, even during an open trade.

A fast price fall can therefore put your account at risk. Other plans update their limit at the end of the trading day.

GFF does not allow overnight or weekend positions. On most plans, you must close every trade by 3:55 p.m. CT. Instant Lite uses 4:45 p.m. ET instead. 

This helps you avoid overnight moves, when index futures have 7% limits and a 3.5% dynamic breaker. Still, different limits apply from 3:00 to 4:00 p.m. CT, so closing before the deadline matters.

News can also cause sudden moves. Several GFF plans allow news trading during evaluation, but funded accounts have rules about trading close to major announcements.

GOAT Daily uses a news restriction in both stages. Check the rules for your plan before opening a trade around the news.

Micro futures let you trade smaller positions. One MES point is worth $5, compared with $50 for ES. A 20-point move against you means a $100 loss on one MES contract or $1,000 on one ES contract, before fees. During a CME halt, you cannot close a trade until the market reopens, making position size important.

A CME market halt at Level 1 or Level 2 lasts 10 minutes for futures, but prices may open much higher or lower afterwards. Your stop-loss order may also fill at a worse price. Learn more in our guide to how futures proprietary trading firms work.

A Short Checklist for Fast Markets

Fast price movements can make trading harder, especially during major news events such as jobs reports or interest rate announcements. Before you trade, decide how many contracts to use, where to place your stop-loss, and how much you can afford to lose. 

Also, plan for the chance that your stop order may not fill at your chosen price:

• Check CME's daily Price Limit Update to see the latest limits for your market.

• Know the reference price and the three limit levels before trading stock index futures.

• Use smaller micro contracts when prices are moving too fast.

• Remember that stop-loss orders may fill at worse prices, so avoid risking too much on one trade.

• Close all positions before your GFF plan's trading deadline.

Trade the Rules You Know With Goat Funded Futures

Knowing how price limits and trading halts work helps you prepare for sudden market moves. With Goat Funded Futures (GFF), you can put that knowledge to use by trading simulated funded accounts worth $25,000 to $150,000, with the chance to earn real cash payouts when you meet your plan's requirements.

Getting started is simple. Choose from our EOD, Flex, 1-Day-Pass, or Daily Payouts challenges, each with a one-phase evaluation and no time limit to pass.

Want to skip the evaluation? Our Instant Classic and Instant Lite plans let you start trading a simulated funded account immediately.

You also get a $0 activation fee on every plan, access to popular futures markets like ES, NQ, CL, and GC, and clear trading rules to help you manage risk.

Why settle for one funding option? Compare our 6 trading plans, find the right fit for your trading style, and get access to up to $150,000 in simulated capital with zero activation fees.

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