Extended data:
After the forced liquidation is forced by the company, the remaining funds are the total funds MINUS your losses, and generally there will be a part left. Commonly used in spot gold and futures trading. The fund market is relatively rare, and there will be forced liquidation only in margin trading, so there are few cases of forced liquidation of funds.
If investors invest in classified fund B, the discount of B share of classified fund may cause the holders of B share to suffer great losses. Due to the leverage effect of B share of graded funds, investors may be forced to close their positions.
Compulsory liquidation refers to the compulsory measures taken by the exchange to liquidate the positions of members and customers in accordance with relevant regulations. The implementation of the compulsory liquidation system can stop the expansion and spread of risks in time.
The Measures for the Administration of Risk Control of China Financial Futures Exchange stipulates that compulsory liquidation will occur in the following five situations:
1. The balance of the settlement reserve of the settlement member is less than zero, and it has not been replenished within the prescribed time limit.
Two, customers, trading members engaged in self-operated business positions beyond the position limit standard, and failed to close the position within the prescribed time limit.
3. Forced liquidation by the exchange due to violation of regulations or breach of contract.
Four, according to the emergency measures of the exchange should be forced to close the position.
Others will be forced to close their positions.
Forced liquidation shall be carried out by members themselves, and the time limit shall be the first trading time after the market opening. The price of forced liquidation is formed through market transactions. If the member fails to complete the implementation within the prescribed time limit, it will be enforced by CICC.
What is the execution procedure of compulsory liquidation?
The Measures for the Administration of Risk Control of China Financial Futures Exchange stipulates that the execution procedures of compulsory liquidation are as follows:
First, pay attention. The Exchange shall issue a compulsory liquidation request to the relevant clearing members in the form of "Notice of Compulsory Liquidation" (hereinafter referred to as "Notice"). Unless specially delivered by the Exchange, the notice is sent with the settlement data of the day, and the relevant settlement members can obtain it through the Exchange system.
Second, implementation and confirmation.
1. After the opening of the market, the relevant members shall close their positions by themselves until they meet the requirements of the Exchange.
2. If the clearing member fails to complete the liquidation within the prescribed time limit, the Exchange will carry out compulsory liquidation on the remaining part.
3. The results of forced liquidation are sent with the trading records of the day, and relevant information can be obtained through the exchange system.
Information provided by China Financial Futures Exchange.