Thailand Exchange Considers New Measures to Expand Silver Futures Limit Switch

Thailand’s major futures exchanges are advancing efforts to strengthen their response to price fluctuations in the silver futures market. They have indicated the possibility of significantly revamping the limit switch mechanism as part of a review of current trading rules. According to Jin10, this initiative is positioned as a key measure to address increasing market volatility.

Are Current Price Limits Insufficient?

Traditionally, online trading of silver futures employed a system that temporarily restricted trading if daily price movements reached ±30%. However, recent changes in market conditions have led to criticisms that these limits are no longer fully effective. Considering trading efficiency and the interests of market participants, more flexible responses are increasingly required.

What Changes with the Limit Switch Adjustment?

The proposed plan suggests that once silver futures experience price movements reaching ±30%, the subsequent limit switch could be expanded up to ±100%. This phased approach aims to prevent excessive trading restrictions during rapid market fluctuations, enabling a more flexible trading environment. The exchange’s decision reflects practical considerations of market participant needs and rule revision strategies.

Balancing Market Stability and Trading Efficiency

Underlying this measure is the challenge of allowing significant market swings while maintaining systemic stability. The exchange is not merely easing restrictions but exploring a step-by-step introduction of the limit switch to suppress extreme price volatility while preserving normal market functions. This approach aims to enhance transparency and trust in the silver futures market, while creating an environment where more participants can respond flexibly.