Navigating CME Price Limits with Funded Futures Family
Our mission is to create a secure trading environment by protecting our traders from volatile and hazardous market conditions. To achieve this, we enforce strict guidelines that prohibit trading when a product is within 2% of a CME price limit. This policy is essential in shielding traders from the risks associated with extreme market fluctuations that could result in significant losses.
What Are CME Price Limits?
A price limit is the maximum price range permitted for a futures contract during each trading session. When markets reach these limits, various actions may occur depending on the product being traded:
Markets may temporarily halt to allow for expanded price limits.
Certain markets may remain in a limit condition.
Trading may stop for the day in compliance with regulatory rules.
These measures are in place to maintain market stability and prevent excessive volatility.
Accounts Impacted by This Policy
The 2% price limit policy is strictly enforced in the following account types:
Sim Funded Account
Live Funded Account
This ensures all traders are aligned with our risk management standards.
Understanding CME Price Limits for Your Contracts
Price limits are calculated based on the end-of-day settlement price and can vary by:
Product
Contract month
Time of day (overnight limits differ from those during business hours)
The CME updates price limits daily at 5:05 PM EST after each trading session. You can find the most recent updates on the CME Price Limits page.
How to Avoid Trading Within 2% of a Price Limit
For equity products such as ES, MES, NQ, MNQ, RTY, M2K, YM, and MYM, overnight price limits have expanded from 5% to 7%. To avoid trading within 2% of these limits, follow these steps:
Monitor % Net Change: Most trading platforms display the "Net Change" as prices fluctuate throughout the day. To track how close your product is to the price limit, ensure the "% Net Change" column is added to your trading platform’s quote board.
Calculate Stop Levels: Use the % Net Change to calculate the price levels at which you should stop trading. For instance, if the price limit is 7%, your 2% rule calculation would look like this:
Example:
Reference Price: 18,556.00
7% Limit: 19,846.75 (upper limit) and 17,265.25 (lower limit)
Stop trading when:
Market price exceeds: 18,556 x (1 + 0.07 - 0.02) = 19,483
Market price falls below: 18,556 x (1 - 0.07 + 0.02) = 17,628
By staying mindful of these calculations, you can protect yourself from entering trades in high-risk zones.
Why Is The Caution?
The 2% price limit policy is enforced to safeguard both our traders and the firm from undue risk. Markets trading within 2% of their price limits often exhibit heightened unpredictability and volatility, making them unsuitable for responsible trading.
Additionally, it is vital for traders to have a thorough understanding of the markets they participate in, including contract specifications and price limits. As a trader, this knowledge forms the foundation of effective risk management.
Learn More
For detailed information about your favorite trading products, visit the CME Group website. Simply navigate to your product from the homepage to access its specifications, price limits, and more.
We’re committed to providing professional-grade tools and risk protocols to ensure our traders succeed in a structured and secure environment. Stay informed, trade responsibly, and always prioritize risk management.