Limit Down Update and Margin Effect
As the US market is about to open in 40 minutes.
2 important things to remember,
US Margin Usage level hit all time high not too long ago
Then the selloff started. Retail traders almost always average down thanks to someone who keep popping the stock market artificially. Thus a small drop of 5% in a midcap to bigcap stock can impact many stock speculators’ ability to withstand the margin call.
Limit Down Levels on Emini S&P 500, Nasdaq 100 and Dow 30
As of Jan 2011, overnight limit for both are 5% and RTH limit are 10%.
At the time of the price limit guide was released, that translate to 60 pts for ES in overnight and 120 pts for RTH. And for NQ it is 130 pts for overnight and 260 pts for RTH.
YM 5% was 550 and 10% was 1150.
The guide can be found here.