A Limit Move in the Futures Market Is

question 2

Multiple Choice

A limit move in the futures market is:

• A) a movement of the futures price in either direction equal to the daily price limit
• B) an order to execute a futures trade only if it touches a certain price
• C) a movement of the position limit in the futures market
• D) an extreme movement in the commodity price index which shuts the market down
• E) None of these answers are correct.

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Definitions:

Opportunity Cost

Opportunity cost is the potential benefit that one misses out on when choosing one alternative over another.

Black Markets

Illegal markets that arise when selling, trading, or buying goods or services are prohibited by law or are controlled by restrictive practices.

Price Floors

A legal minimum price below which a good or service cannot be sold, intended to protect producers from market prices that are too low.

Agricultural Products

Items derived from farming or the cultivation of animals, including food, fiber, and other goods.