In the process of stock trading, it is inevitable that stocks will be liquidated. Stocks are generally essentially a stop-profit and stop-loss behavior. In the stock market, the liquidation of stocks often refers to forced liquidation, and forced liquidation mostly occurs in margin trading and securities lending business.

Normally, the reason why forced liquidation occurs in the margin trading business is mainly because the investor’s maintenance guarantee ratio is less than 130% and there is no additional collateral. In this case, The position will be forced to be liquidated. But the forced liquidation of a stock does not indicate whether the stock price rose or fell.

Of course, when financing, if the stock price drops below the maintenance guarantee ratio, it will drop, and the position will be closed if no additional collateral is added, which means that the stock will fall; securities lending means borrowing from securities. For securities, sell them at a high price, wait for the stock price to fall, and then buy them at a low price to return the securities. If the stock rises instead of falling, the position may be liquidated.