Classification of liquidation
Closing position is one of the terms of futures trading, which refers to the act of selling stocks that have been bought by many bulls during futures trading. There are two kinds of liquidation, hedging liquidation and forced liquidation.
1. Hedging liquidation: Hedging liquidation is an enterprise's behavior involving futures before closing, which is generally carried out on the same futures exchange. Enterprises can choose to buy futures contracts with the same trading time as before, or they can choose other ways;
2. Forced liquidation: Forced liquidation refers to the third party's forced liquidation of the original position. Generally, if the customer fails to add the trading margin in time, or commits other illegal acts, it will be forced to close the position. Of course, the most common reason is that the deposit is not paid enough. If the market situation is not very good, most futures companies will force some users to close their positions in order to avoid the continuous expansion of losses.