What exactly do you mean by closing positions and exploding positions? Perhaps people who have just come into contact with the stock market are confused about this. This is normal, because there are many technical terms in the stock market, and it is impossible to remember them all at once. Therefore, Bian Xiao sorted out what liquidation and explosion are for everyone, hoping to help everyone and enrich their understanding of the stock market.

What exactly do liquidation and explosion mean?

Generally speaking, liquidation is the act of selling futures and contracts bought before, or buying futures contracts sold before. Trading in the opposite direction, but the variety, quantity and delivery month of futures are the same, is the behavior of traders to close futures trading.

Short position refers to the situation that the margin return is negative, that is, the loss is greater than the margin in the investor's account.

What do you mean by opening and closing positions?

1 short position: short position involves margin trading. When the investor's margin is not enough to offset the losses caused by market fluctuations, the exchange will force investors to close their positions, which is what we often call short positions. For example, the contract value of an investor's position is 654.38+10,000 yuan, and the deposit paid for the position is 5,000 yuan. When the contract loss reaches 5,000 yuan, it will be forced to close the position by the exchange.

2 liquidation: that is, liquidation through reverse trading can take profit or stop loss.

In fact, the short position itself is a kind of liquidation, but the short position is enforced by the exchange. In addition, short positions must mean losses, and closing positions can break even. When the market is unfavorable, the losses caused by short positions are greater than those caused by investors' independent liquidation.

The meaning of liquidation and explosion

Closing positions refers to futures traders buying or selling futures contracts with the same variety, quantity and delivery month, but in the opposite direction, and closing futures trading.

Short positions, because the market changes too fast, the deposit in the investor's account is not enough to maintain the original contract before the additional deposit. This kind of margin is "zero" caused by forced liquidation due to insufficient margin, commonly known as "short position"

Scientific opening and closing can avoid risks to a great extent and minimize the risk coefficient of capital investment. Although its negative factors may also bring about a moderate reduction in profits in theory, the stock market is a high-risk investment market. It is decided that the safety of capital investment must be considered, and ensuring the safety of original investment is the basis of investment. It is a scientific and steady investment strategy to obtain the inevitable investment income under the condition that the original funds are safe.