Forced liquidation is also called forced liquidation, and it is also called being cut/cut/exploded. According to the different subjects of compulsory liquidation, compulsory liquidation can be divided into exchange compulsory liquidation and brokerage compulsory liquidation. Commonly used in spot gold and futures trading.
The Administrative Measures for Risk Control of China Financial Futures Exchange stipulates that compulsory liquidation will occur in the following five situations:
(1) The balance of member settlement reserve fund is less than zero, and it has not been replenished within the prescribed time limit;
(2) The position exceeds the position limit standard and fails to close the position within the prescribed time limit;
(3) Being punished by CICC for compulsory liquidation due to violation of regulations;
(4) According to the emergency measures of CICC, the liquidation should be forced;
(5) Other positions should be closed by force.