To safeguard traders from extreme market volatility, TX3 Funding Futures enforces a 2% price limit rule, prohibiting trading within 2% of the CME price limit. This rule aims to prevent traders from exposure to excessive volatility, reducing the risk of significant losses. Below is a comprehensive overview of the 2% price limit rule, including how to understand price limits, apply them in your trading, and stay informed of updates.

Understanding the 2% Price Limit Rule

• Definition: A price limit is the maximum allowable price range for a futures contract during each trading session. When this limit is hit, trading actions may vary by product, such as market pauses or cessation for the remainder of the session, as determined by regulatory guidelines.

• Applicability: The 2% price limit rule applies to both Sim Funded and Live Funded Accounts, ensuring that traders maintain prudent risk management and avoid trading during potentially harmful market conditions.

• Enforced Rule: TX3 Funding Futures prohibits traders from placing trades within 2% of the CME price limit. This means that if the price of a futures contract approaches 2% of the limit, traders should refrain from entering new positions to avoid significant exposure.

Checking CME Price Limits

• Daily Updates: Price limits vary by product and are updated daily at 5:05 PM EST. Traders must check the current CME price limits to stay informed.

• Resources to Check Limits:

  • CME Price Limits Page: Traders can consult the official CME website to review the updated price limits for different products.

  • Trading Platform Quote Board: Traders may also use their trading platform's quote board to monitor the % Net Change for their specific contract.

Equity Product Price Limits

• Equity Products: For equity products such as ES, MES, NQ, MNQ, RTY, M2K, YM, and MYM, overnight price limits are set up to 7%.

• Applying the 2% Rule: If the price limit for a product is 7%, traders should avoid trading if the % Net Change approaches within 2% of this limit. For example, if the % Net Change is approaching 5%, trading should be paused to comply with the 2% rule.

How to Avoid Trading Near Price Limits

• Monitor the % Net Change: Always monitor the % Net Change for the product on your trading platform. This is crucial in ensuring you do not enter trades near the price limits.

• Stop Trading Early: It is advised to stop trading well before the product reaches the 2% proximity of the price limit to ensure compliance.

Key Considerations for Traders

• Daily Review: Make it a habit to review the CME price limits daily at 5:05 PM EST to stay up to date with current trading conditions.

• Avoiding Volatility: The 2% price limit rule is in place to protect traders from high-risk situations that can arise when trading near price limits, where sudden market moves can lead to significant losses.

TX3 Funding Futures is committed to ensuring a safe trading environment by enforcing the 2% price limit rule. By adhering to this rule, traders can protect themselves from the risks associated with extreme market volatility and focus on consistent, sustainable trading strategies. For further questions or clarifications regarding the 2% price limit rule, please reach out to our support team.