What Is Limit Up?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

Limit Up is a term used in commodities trading 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.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.