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 on the compulsory liquidation system of futures in China;

China's futures exchange stipulates that the trading ownership will be forcibly closed 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.