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ES Mini 5% circuit breaker=free money?
I noticed that tonight the ES mini hit 1999/-5% and this triggered a circuit breaker. I also noticed that 5% is the max the ES can go down overnight until the cash open according to CME rules. If this is so then how come anyone would sell at 1999/how come everyone did not buy at 1999 as it would be 100% reward to risk ratio as the ES is now trading at 2033 three hours later. Am I missing something? Any help would be greatly appreciated as I cannot seem to find the answer anywhere using Google.
Thanks for your insight and the quick, helpful response.
So if I am concluding this correctly then the e-mini could have stopped at -5% for the night and if you got in around then, if all of a sudden the market fair value was say, 1950 like you mentioned, then the e-mini market would have locked at 1999 and there would have been no way to get out until the morning when it opened even lower? Is this the risk to getting in at the limit for overnight losses, the risk that the market may "lock" and there is no liquidity to get out until it opens?
I understand the market may go lower upon open but it just appeared that with a -5% limit for the ES that was triggered at 1999 then at least from 1am EST until 9:30am EST it would have been a risk free trade (unless a lock described above is possible)?