1. Different operation modes: hedge liquidation means that investors close their positions by operating transactions in a direction opposite to the current state, while performance liquidation means that investors close their positions by performing agreed delivery when the futures they hold are due for delivery;

2. Different operators: the performance liquidation is generally operated by relevant institutional investors who meet the operating conditions, and individual investors cannot perform performance liquidation, but can only close their positions through hedging transactions;

3. Different operating time: major exchanges and trading centers do not allow individual positions to enter the delivery month, which leads to the hedging position closing time being much shorter than the performance closing.

These are the three differences between hedging liquidation and performance liquidation.

Precautions for hedging and liquidation

Because hedging liquidation has many constraints on operators, there are not many operating institutions that can close their positions through the threshold, so most futures transactions in the market end up by hedging liquidation. It is worth noting that when investors hedge, the number of commodities and specific contracts in both futures contracts must be the same, so as to ensure that they can close their positions.