Closing position refers to the behavior of futures traders to buy or sell futures contracts with the same variety, quantity and delivery month, but in the opposite direction, and to close their positions. Simply put, it is "buying and selling, buying when selling".

The whole process of extended information futures trading can be summarized as opening position, holding position, closing position or physical delivery. Opening a position, also known as opening a position, refers to the new purchase or sale of a certain number of futures contracts by traders.

Buying and selling a futures contract in the futures market is equivalent to signing a forward delivery contract. If traders keep futures contracts until the end of the last trading day, they must settle futures transactions by physical delivery or cash settlement. However, only a few people make physical delivery, and most speculators and hedgers generally choose to sell their futures contracts or buy back their futures contracts before the end of the last trading day.

That is to say, the original futures contract is written off by a futures transaction with the same amount and opposite direction, thus ending the futures transaction and relieving the obligation of physical delivery at maturity. This behavior of buying back a sold contract or selling a bought contract is called liquidation.

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Baidu encyclopedia-liquidation