The popular saying in China is that all positions in the account are forced to close (sometimes it refers to bankruptcy, that is, there is no additional margin for funds, and finally it is forced to close). And wearing a warehouse means that after the forced liquidation, the account is still full of money.

Generally speaking, when the net value of your account (that is, the total amount of account funds minus floating losses) can't reach the maintenance margin (generally speaking, the margin for domestic transactions is lower than that for overseas transactions), you will be required to add margin, and when you can't add funds on time, you will be forced to close your position. Some futures companies use "risk degree" to measure, which is basically the same thing. However, it usually happens in discontinuous transactions when there is a gap in the market. Because of the gap, you will not only lose money, but even post it backwards.

For example:

The current price of soybean is 4000 yuan, and the account fund is 1 000 yuan. If you do more, you need a position deposit of 4 thousand yuan. Then when your net loss is less than 4000 yuan, you will be asked to add money. If you can't replenish the funds on time, you will be forced to close your position, that is to say, when the floating loss of this hand 10 ton exceeds 6000 yuan, the price will naturally fall below 4000-600 = 3400 yuan, and you may be forced to close your position. Some companies require additional margin and compulsory liquidation after the risk level reaches 100%, because the risk level = position margin/customer's equity, so the same as above. It can be seen that the part of your account MINUS the position margin is the settlement reserve. The bigger this part, the bigger your buffer margin, and the smaller the risk of being forced to close your position.

If you make 1 lots, such as 3 lots, then futures companies will generally close their positions one by one in the session, because when the market continues, after you draw 1 lots, the margin of the remaining 2 lots will be enough for the time being. If the price continues to develop in an unfavorable direction and the margin of the remaining 2 lots is insufficient, you can draw another hand. Until all positions are forcibly closed, it is called an explosion. So generally speaking, if you finally burst, you should have less money left than your primary deposit. If you keep increasing the margin and finally run out of money, it's basically bankruptcy.

However, if there is an unfavorable gap in the market, for example, it was still above 3,400 yuan that day, but it suddenly opened lower the next trading day, or the price could not be closed after continuous opening, resulting in the price being lower than 3,000 at the time of final closing, then your loss has exceeded 1000, that is, the loss has exceeded all your account funds. If you don't replenish enough funds in this process, you will still owe money to the futures company even if you force the liquidation. This is called threading. Once this happens, it will be a serious risk accident, because futures companies will face irreparable risks and have to bear the excess losses themselves.

Therefore, basically, the compulsory liquidation system, including the practice that futures companies generally increase the margin ratio at the margin level required by the exchange, is to leave enough margin to avoid the occurrence of warehouse-piercing accidents.

I accidentally wrote a lot, which should be clear enough.