The president of Kidder, Peabody & Co. has become the first executive of a major Wall Street brokerage to back limiting the amount stock prices can move up or down in a single day.

The executive, Max C. Chapman, said in an interview that he supports Chicago futures market experts who are suggesting that a presidential commission studying the market's October collapse recommend daily limits.

Nicholas F. Brady, the investment banker appointed by President Reagan to head the panel, has taken no position on the issue.

Chapman said the tremendous volatility in stock prices in October, and the disorderly trading that accompanied the market collapse, persuaded him that daily price limits are needed on stocks and stock index futures contracts.

Chapman said he urged the presidential commission to seriously consider price limits before submitting its recommendations for reforms to President Reagan.

The commission is expected to meet later this week to begin formulating conclusions about the causes of the market collapse and possible reforms. One member of the panel, Capital Guardian Trust Co. Chairman Robert Kirby, said last week that if price limits are imposed they ought to apply to stocks as well as stock index futures.

Stock index futures contracts give investors the opportunity to bet on the future movement of broad stock market averages, such as the Standard & Poor's 500.

The stock market collapse has been blamed in part on volatility in stock index futures, and some financial experts have said that the futures ought to have permanent daily price limits. Once a contract reached its upper or lower daily price limit, it could trade no further in that direction until the next trading day.

"It is the notion of trying to give the market some time to assimilate information," Chapman said. "It would take out the violent swings. The consideration of limits on stocks and futures provides an escape valve when the market psychologically varies one way or another beyond a reasonable level of volatility."

Other New York brokerage chiefs disagree. "I think it stinks," said Alan C. (Ace) Greenberg, chairman and chief executive of Bear, Stearns & Co. "I'm a great believer in the free market. I'd rather see a stock sell where it is going to sell."

Regarding the advantages of limits during the kind of market chaos that dominated in October, Greenberg said, "It comes along once in a lifetime, like the Chicago fire or the San Francisco earthquake. Why worry about something that happens every 35 or 50 years?"

New York Stock Exchange officials said last week they oppose price limits on stocks because the daily trading halts might hurt investor confidence. But Chapman said stock price limits would give investors additional time to process information during unusual market periods.

He said a major problem in October was that, due to an absence of buyers and a lack of accurate price information, stock prices fell sharply between trades.

Chapman said daily price limits would strengthen the stock market by giving buyers more time to emerge. Once daily lower limits are hit, he said, futures contracts sometimes begin to trade at higher prices as buyers learn that the lower limit has been reached and the contract's price can drop no further that day.

Chapman said the market also would benefit from the limits because buyers would know that it could not go into a disorderly free fall.