Forced lightening refers to the trading of investors who declare and close the unfinished trading at the daily limit price and automatically match the net position profit of the contract according to the position ratio.

Forced liquidation is also called forced liquidation. According to the different subjects of compulsory liquidation, compulsory liquidation can be divided into exchange compulsory liquidation and brokerage compulsory liquidation. Commonly used in spot gold and futures trading.

2. Differences in treatment methods

The processing method of compulsory lightening is to determine the profit and loss of investors' net positions according to the weighted average price of investors' trading volume; The closing range of investors with net position profit is the distribution of investors with net position profit greater than zero and the number of closed positions. The exchange will distribute the declared closed positions to investors whose net position profit is greater than zero. After the close of D2 trading day, the trading system will automatically execute forced liquidation according to the principle of forced liquidation.

The method of forced liquidation is that when only the self-operated account defaults, the positions of the self-operated account are forced to be liquidated according to the order of the total positions in the contract; Only when the brokerage account is in default, the balance of settlement reserve fund and the closing amount of the self-operated account shall be used to make up first, and then the position in the brokerage account shall be closed; When both the proprietary account and the brokerage account default, the order of forced liquidation is proprietary account first, then brokerage account.

3, the difference between the implementation conditions

The execution condition of compulsory lightening is that all positions that can't be closed have been declared in the exchange system at the price of the price limit, and the net position loss of the client contract unit is greater than or equal to 10% of the settlement price on the trading day.

The execution condition of compulsory liquidation is that the balance of the member's settlement reserve fund is less than zero, and it has not been replenished within the prescribed time limit; The position exceeds the position limit standard and fails to close the position within the prescribed time limit; Being punished by CICC for compulsory liquidation due to violation of regulations; According to the emergency measures of CICC, liquidation should be compulsory.

Baidu encyclopedia-forced lightening

Baidu encyclopedia-forced liquidation