The Comprehensive Guide to

Passive Income Investing


Learn the secrets of how Paul Tracy generates over $XXX,XXX per month in passive income!

How to Become Financially Independent Through Passive Income Investing

What is a Locked Market?

A locked market, also called a daily trading limit, is the maximum gain or loss allowed on a derivative or currency in one trading day.

How Does a Locked Market Work?

Let's say a forward contract on Company XYZ stock has a trading limit of X. Accordingly, if the price change exceeds X during the trading day, a 'locked market' occurs, and trading in the contract halts.

China has a daily trading limit of 0.5% on its national currency, meaning that if the price changes more than 0.5% in either direction during the day, trading is halted until the next day.

Why Does a Locked Market Matter?

Locked markets prevent extreme volatility or price manipulation in the markets. If trading approaches the upper level of daily trading limit, we say that the security had an 'up limit' day. Likewise, if trading approaches the lower level of the daily trading limit, we say the security had a 'down limit' day.

Ask an Expert about Locked Market

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Locked Market.

Be the first to ask a question

If you have a question about Locked Market, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.