The new natural gas limit would be $1.000 per million British thermal units.
The board amended the procedures for expanding the limits, so that if any contract is traded, bid, or offered at the limit for five minutes, the market is halted for 15 minutes. When trading resumes, expanded limits are in place that allow the price to fluctuate by $2.000 in either direction of the previous day’s settlement price.
Currently, the market is halted for one hour if the price in one of the first two months is traded at $.75 for five minutes. When the market reopens, those limits are extended to all months, but are moved to surround the previous limit in place in the direction of the move. Under the new rules, if a halt occurs during the last two days of trading in a contract, when the market reopens, there are no price limits placed on either of the first two nearby contract months.
Exchange Chairman Daniel Rappaport said, “These changes will simplify our rules and provide the opportunity for the futures market to more closely track cash market movement, while still providing a window for information dissemination and risk assessment during extraordinary price movements.”
These changes must be approved by the Commodity Futures Trading Commission prior to implementation.
