In the process of holding positions, traders will have floating profits and losses (the difference between settlement price and transaction price) due to the constant changes of market conditions, so the funds actually available in the margin account can be increased or decreased at any time.
Floating profit will increase the balance of margin account, while floating loss will decrease the balance of margin account. The minimum balance that must be kept in the margin account is called maintenance margin. Maintenance margin: settlement price x position x margin ratio xk(k is a constant, called maintenance margin ratio, which is usually 0.75 in China).
Extended information When the book balance of the margin is lower than the maintenance margin, the trader must replenish the margin within the specified time, so that the balance of the margin account is ≥ settlement price x position x margin ratio, otherwise the exchange or institution has the right to force liquidation on the next trading day. This part of the margin that needs to be replenished is called additional margin.
Positions that are forced to close positions are first speculated by the exchange and then hedged; And according to the order of the total positions of contracts after the closing of the previous trading day, the contracts with large positions are selected as compulsory liquidation contracts; Then, according to the net position loss of all investors of the member, the contract is determined from big to small. If there are multiple members who need to close their positions by force, the members who need to increase the margin will close their positions first in the order of increasing the margin.
Baidu encyclopedia-forced liquidation
Baidu Encyclopedia-Futures Margin