CME Revises Equity Index Price Limits, Removing 2.5 Percent Downside Limit May 13
May 4, 2001—Chicago Mercantile Exchange Inc. (CME) has announced that, in response to customer requests, it will revise the price limits on its equity index contracts by eliminating the initial 2.5 percent limit effective with the start of trading on Sunday, May 13. The change was approved by CME’s Board of Directors this week. The overnight price limit on the GLOBEX®2 system—both up and down—will also be expanded from 2.5 to 5 percent.
Price limits were instituted at CME shortly after the market decline of 1987. Over the years, they have been revised numerous times to reflect current market conditions. The 10- and 20- percent "circuit breaker" limits are coordinated with trading halts in the underlying securities markets; the 5- and 15-percent "speed bump" limits apply to CME index futures only. The 2.5 percent limit has always applied to CME index futures only.
Set at the beginning of each calendar quarter, the price limits apply to trading in CME futures and options on the S&P 500, E-mini S&P 500, S&P 500/BARRA Growth, S&P 500/BARRA Value, S&P MidCap 400, Russell 2000, Nasdaq-100, E-mini Nasdaq-100 and FORTUNE e-50™ indexes.
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