The impact of closing futures on the counterparty is different. For the holder, failure to deliver may lead to financial losses, increase costs and affect reputation. Some exchanges stipulate liquidated damages to encourage holders to actively perform their duties before the delivery date. For exchanges, closed futures also help to maintain market stability. By stipulating certain liquidated damages and contract limits, the exchange can reduce the liquidity and volatility of contracts, thus improving the predictability and stability of the market.
Futures liquidation is an important phenomenon in the futures market, and it is also a trading factor that must be seriously considered. Although closed futures will bring trouble to traders, it may bring more opportunities for traders to make rational use of this market feature and reduce its adverse effects.
Closed futures refers to the state that the contract cannot be delivered within the delivery period agreed in the futures contract. It will have different effects on both sides of the transaction, the holder may have to pay liquidated damages, and the exchange will maintain market stability by stipulating certain liquidated damages and contract limits. Although it will bring trouble, it is also an important market phenomenon in the futures market, which can be rationally utilized to reduce its adverse effects and gain more trading opportunities.