Hedging and liquidation means that futures companies buy futures contracts in the same futures exchange and sell futures contracts in the same delivery month, thus liquidating the futures contracts sold or bought before.
Forced liquidation refers to forced liquidation, also known as being cut or cut.
There are many reasons for compulsory liquidation in futures trading, such as failure to add trading margin in time, violation of trading position restrictions and other illegal acts, temporary changes in policies or trading rules. In the standardized futures market, it is most common to be forced to close positions because of insufficient trading margin. In the course of trading, the futures exchange takes compulsory liquidation measures in accordance with the regulations, and the losses caused by liquidation shall be borne by the members or. The realized liquidation profit, which belongs to the futures exchange's forced liquidation due to members or illegal behaviors, is included in the non-operating income of the futures exchange and is not distributed to the illegal members or; Due to changes in national policies, continuous daily limit, daily limit and other reasons, compulsory liquidation is distributed to members.
Specifically, when the trading margin required for the position contract is insufficient, and the futures company fails to add the corresponding margin in time or take the initiative to reduce the position according to the notice of the futures company, and the market situation is still developing in the direction of unfavorable positions, the futures company forcibly closes part or all of the positions to avoid the expansion of losses, and the income will be reduced. The act of filling a gap with gold.