When it comes to futures, we have to talk about the risks of futures. Some people are afraid of futures and even talk about the color change of futures. In fact, many people lack rational understanding of futures, and may lose all their money and be forced to close their positions by futures companies. Even if you lose all your money, you will still owe money to the futures company. Of course, these extreme situations have happened before, but we must understand the reasons and fully understand the sources of risks in order to better prevent risks.
Because futures are margin trading, that is, the so-called leverage mechanism, trading contracts do not need full funds, as long as a certain amount of margin is paid in the futures exchange, which is called margin. For example, copper, according to 70 thousand lots, 5 tons in one hand and 350 thousand in the other hand. However, trading in a futures company does not require 350,000 lots. Generally, the margin ratio is about 15%, so it is about 50,000 lots. Then the actual situation is that the contract value of 350,000 yuan is leveraged with a deposit of 50,000 yuan, and the contract profit and loss of 350,000 yuan is deducted from 50,000 Li. If it is earned, it will be automatically added to the deposit account, and if it is lost, it will be deducted from the deposit of 50,000 yuan. For 350,000 yuan, if it is a loss of 50,000 yuan (loss 14%), the daily limit of futures varieties will be 5% (the exchange will make temporary adjustments according to the situation), that is to say, if three consecutive daily limit boards in the same direction have not been closed, then the margin will be gone, that is, the position will be broken.
However, this will not happen in actual transactions. What I said above is a theoretical situation. Futures companies and exchanges are very strict in risk control and prevention. If there is a continuous daily limit, the exchange will first take many measures to resolve risks and force the liquidation of members. Secondly, futures companies will not allow customers to continue trading under the condition of insufficient margin. If only 50,000 yuan is used to buy the primary copper in the futures account, the market will develop in a slightly unfavorable direction, and the available funds will be negative. When the customer's margin is insufficient, the futures company has the right to force the liquidation of the contract held by the customer, and the margin released after liquidation will be used to make up for it. Therefore, futures trading does not advocate Man Cang operation.
The compulsory liquidation system generally includes:
1. Forced liquidation due to insufficient trading margin in the account. This is the most common situation. When the price changes unfavorably, the margin account is not enough to maintain the existing position after the settlement on the same day, and the member (customer) fails to increase the margin in time or reduce the position voluntarily according to the notice of the futures exchange (futures company), and the market still develops in the direction of unfavorable position, the futures exchange (futures company) forcibly adjusts some or all positions of the member (customer) to fill the margin gap with the funds obtained. The implementation of the compulsory liquidation system is conducive to avoiding the expansion of account losses. It is an effective risk control measure to effectively prevent the spread of risks by controlling the risks of personal accounts.
2. If a member (customer) violates the position limit system and forcibly closes his position, that is, he exceeds the specified position limit and fails to reduce his position within the time limit specified by the futures exchange (futures company), some positions exceeding the position limit will be forcibly closed. Forced liquidation has become a powerful supplement to the position limit system.
Provisions of China futures compulsory liquidation system
According to the regulations of China's futures exchange, the trading ownership will be forced to close when a member or customer has one of the following circumstances.
: (1) The balance of member settlement reserve fund is less than zero, and it has not been replenished within the specified time limit.
(2) The positions of clients and trading members engaged in self-operated business exceed their position limits.
(3) Being punished by the exchange for compulsory liquidation due to violation of regulations.
(4) Forced liquidation according to the emergency measures of the Exchange.
(5) Other positions that should be closed by force.
In China, futures companies have special risk control personnel to monitor the risk of customers' positions in real time. When the available funds other than the margin are negative, the futures company will inform the customer to add the margin or close the position by himself. If the customer does not handle it by himself, the price will continue to change in a direction that is not conducive to the position, and the futures company will forcibly close the position according to the specific criteria of compulsory closing.