Limit Down

What is Limit Down?

Author: Austin Anderson
Austin Anderson
Austin Anderson
Consulting | Data Analysis

Austin has been working with Ernst & Young for over four years, starting as a senior consultant before being promoted to a manager. At EY, he focuses on strategy, process and operations improvement, and business transformation consulting services focused on health provider, payer, and public health organizations. Austin specializes in the health industry but supports clients across multiple industries.

Austin has a Bachelor of Science in Engineering and a Masters of Business Administration in Strategy, Management and Organization, both from the University of Michigan.

Reviewed By: Christy Grimste
Christy Grimste
Christy Grimste
Real Estate | Investment Property Sales

Christy currently works as a senior associate for EdR Trust, a publicly traded multi-family REIT. Prior to joining EdR Trust, Christy works for CBRE in investment property sales. Before completing her MBA and breaking into finance, Christy founded and education startup in which she actively pursued for seven years and works as an internal auditor for the U.S. Department of State and CIA.

Christy has a Bachelor of Arts from the University of Maryland and a Master of Business Administrations from the University of London.

Last Updated:May 5, 2022

Limit Down is a term used in commodities trading to refer to the maximum amount by which the price of a commodity is allowed to fall in one trading day. If the limit is hit, then the market will either close totally for the day or will not be open for trading until the price drops below that limit price.

If there is a major event affecting the price of a commodity (i.e. new discovery of significant and easily accessible oil field, clearing houses reducing margin requirements for gold etc.) then the effects of a Limit Down may mean it takes several trading days for the price of the commodity to reach its new norm due to it being more than a single ‘Limit Down’ price decrease.

 

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