Lesson 6 of 7 · 2 min
Opens, closes & halts
Opening auctions, the cash open, settlement, price limits and trading halts.
Continuous trading isn't the whole story. Several scheduled and unscheduled events change how orders are matched.
Pre-open and opening
Electronic futures typically have a pre-open period where orders can be entered and an indicative price is calculated, followed by an opening process that matches crossing orders before continuous trading begins.
For index futures, the bigger daily event is the US cash equity open at 9:30 am ET. The underlying stocks begin trading, volume surges, and spreads in related products can briefly widen.
Settlement and the close
Futures have a daily settlement price used for margining. The cash equity close and the futures settlement process create their own bursts of activity — rebalancing and index-related flows often cluster there.
Price limits and halts
CME equity index futures have price limits and coordinate with stock-market circuit breakers. When limits are hit, trading can be restricted or paused. Trading can also be interrupted for technical reasons.
Risk
Your stop is not guaranteed to fill at its price during a halt, a limit event or a gap. That's a reason to keep size small enough that a bad fill is survivable.
Trading implication
Know the session timetable and the exchange's limit rules for what you trade. Many traders deliberately avoid the first minutes after major opens and scheduled releases.
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