(2) Futures market hedging is generally to end the contract; Which means liquidation.
Question 2: What is the difference between hedging liquidation and forced liquidation? Closing positions can be divided into hedging closing positions and forced closing positions.
Hedging liquidation refers to the option contract settlement method in which the options held by investors are hedged with the same options with the opposite trading direction and equal trading quantity. Hedging refers to the settlement of previously bought (sold) contracts by selling (buying) futures contracts in the same delivery month. Closing a 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 close futures trading.
Hedging liquidation is the way to liquidate most contracts. When futures trading is closed, the calculation formula for realizing profit and loss is as follows:
Buyer's (long) profit and loss amount = (closing selling price-contract buying price) × contract quantity× contract unit seller's (short) profit and loss amount = (contract selling price-closing buying price )× contract quantity× contract unit 2. Forced liquidation is also called forced liquidation, also called being cut or being cut. According to the different subjects of compulsory liquidation, compulsory liquidation can be divided into exchange compulsory liquidation and brokerage compulsory liquidation.
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.
Second, the difference between hedging liquidation and forced liquidation
Futures contracts used for hedging and liquidation must be the same commodity futures and the same number of contracts. Enterprises complete transactions by selling or buying previously held buying or selling contracts, and liquidation gains and losses occur as an increase or decrease in "futures margin".
In the course of trading, the futures exchange takes compulsory liquidation measures in accordance with the regulations, and the losses caused by liquidation are borne by members or customers. The realized liquidation profit belongs to the futures exchange's forced liquidation due to the violation of members or customers, which is included in the non-operating income of the futures exchange and is not distributed to the violating members or customers; If it is forced to close its position due to changes in national policies, continuous price fluctuations and other reasons, it will be distributed to members or customers.
Question 3: What does "hedging, hedging liquidation" mean?
Hedging can also be translated as "hedging transaction", that is, in order to avoid the price risk in the spot market, trading in the futures market in the opposite direction to the spot market, so as to realize the hedging of the spot. Simply put, it is to buy (or sell) goods in the spot market and sell (or buy) the same kind of goods in the futures market at the same time, so that when the market price fluctuates, the losses in one market can be made up by the profits in another market.
There are two forms of hedging, namely short hedging and long hedging. The so-called short hedging is the trading behavior of buying in the spot market and selling in the futures market. Its purpose is to protect the inventory value of commodities or financial securities that are not sold through forward contracts, or to protect the expected output or the value of forward purchase contracts.
The so-called long hedging refers to the trading behavior of selling in the spot market and buying in the futures market, aiming at preventing the risks brought by selling products at a fixed price through forward contracts.
Hedging liquidation, first explain what hedging is. The so-called hedging is the opposite of the existing open position in the futures market. The variety, contract month and contract quantity of futures contracts traded during the hedging period shall be completely consistent with the hedging contract.
The whole process of futures trading can be summarized as opening positions, holding positions, closing positions 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. In the futures market, buying and selling a futures contract 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 usually choose the time to sell the futures contracts they bought or buy back the futures contracts they sold before the end of the last trading day, that is, cancel the original futures contracts through a futures transaction with the same amount and opposite direction, thus ending futures trading and relieving the obligation of physical delivery due. This kind of repurchase of a sold contract or a sold contract is called liquidation. An open contract after opening a position is called an open contract or an open contract, also known as a position. After opening the position, traders can choose two ways to close the futures contract: either choose the timing of closing the position or reserve it for physical delivery on the last trading day.
Hedge clearing is the act of clearing through two opposite transactions (namely hedging).
Question 4: What does liquidation mean? What are compulsory liquidation and hedging liquidation? Liquidation 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 end futures trading.
Hedging liquidation refers to the option contract settlement method in which the options held by investors are hedged with the same options with the opposite trading direction and equal trading quantity.
Hedging refers to the settlement of previously bought (sold) contracts by selling (buying) futures contracts in the same delivery month.
Close the position and sell all futures (stocks)
Forced liquidation, futures (stock) losses close to the financing amount, the lender to protect themselves, forced liquidation.
Question 5: What do you mean by short position and liquidation?
Question 6: Does anyone know what it means to hedge the closing cost? Hedging liquidation cost Hedging liquidation refers to the option contract settlement method in which the options held by investors are hedged with the same options with opposite trading directions and equal trading quantities. Hedging refers to the settlement of previously bought (sold) contracts by selling (buying) futures contracts in the same delivery month. Closing a 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 close futures trading.
Question 7: How to understand hedging, hedging liquidation and hedging transactions in futures? Hedging is relatively delivery.
Hedging settlement is an act of evading performance.
It's usually like this.
Buying a position and paying it is a way to close the position.
Selling and opening positions corresponds to buying and closing positions, which is another way to close positions.
The hedging time is after the opening of the position, as long as it is within the trading time, find the price to close the position at any time and close the position at any time.
The only restrictions are the price and the number of transactions.
For example, I bought the opening contract of soybean 10 lot (100 ton) 120 1, and the price is 4200 yuan per ton. I can choose to close the position at any time before the expiration. If it is 4500 yuan on Monday, I will close 5 lots, that is, hedge some positions and still hold 5 lots. If the two behaviors you are talking about are hedging, but they are all or part of the settlement.
Question 8: In the principle of hedging liquidation, what does it mean that the delivery months of the previous and subsequent transactions are the same? The principle of the same month or similar month means that the delivery month of the selected futures contract should be the same as or similar to the time when traders actually buy or sell spot goods in the spot market in the future. When choosing futures contracts, we must follow the principle of the same or similar delivery month, because the profit and loss of both markets are affected by the price changes in both markets. Only when the delivery month of the selected futures contract is the same as or similar to the time when traders actually decide to buy and sell spot goods in the spot market can the relationship between futures prices and spot prices be closer and the hedging effect be enhanced. Because, with the arrival of the delivery period of futures contracts, futures prices and spot prices will tend to be consistent. Useful bonus points. thank you
Question 9: The difference between hedging and liquidation. Let's start with liquidation. For example, if you buy a standard European and American position, when the price fluctuates to your ideal position, then you even out (buy or sell) and get a profit.
Let's talk about hedging first. Simply put, a position in the same currency is a hedge. For example, one person buys more orders (long orders) in Europe and America, and one person buys empty orders (short orders) in Europe and America, so it is opposite. In this way, you can see that if a person makes a hedging order, the profit and loss will remain unchanged no matter how the market fluctuates. But pay attention to the issue of overnight interest.