What Is Limit Up?
is a term used in commodities to refer to the maximum amount by which the price of a commodity is allowed to increase 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. terrorist attack on oil pipeline, collapse in large iron mine etc.) then the effects of a Limit Up 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 Up’ price increase.