Crowding is divided into two situations: multi-person crowding and short-position crowding.
Multi-warehouse congestion: when most warehouse receipts in the market are in the hands of multi-warehouses, as the delivery date approaches, short sellers cannot register enough warehouse receipts to fulfill their delivery obligations. At this time, short positions can only be actively closed to avoid default due to non-delivery.
The recent contract price near the delivery date rose due to the active buying of short sellers.
Empty warehouse: When the empty warehouse has enough warehouse receipts for delivery, and the price is at a high level as the delivery date approaches, the empty warehouse can choose physical delivery to avoid closing losses. At this time, speculative bulls can only take the initiative to close their positions.
The recent decline in contract prices near the delivery date is due to the initiative of bulls to sell flat and make up for the decline.
Generally speaking, bulls will generate a capital premium, so they can carry out long-term arbitrage, buy short-term and sell long-term; Under normal circumstances, short positions will generate warehouse receipt pressure discount, which can be used for short-term reverse arbitrage.
Futures is a trading method that spans time. By signing the contract, the buyer and the seller agree to deliver the specified quantity of spot at the specified time, price and other trading conditions.
Futures are concentrated in futures exchanges and traded through standardized contracts. Some futures contracts can be traded through over-the-counter trading, which is called over-the-counter contract. According to the types of subject matter, futures can be divided into commodity futures and financial futures.
The risk reserve system has the following provisions:
1. The Exchange shall withdraw the management fee according to the proportion of 20% of the fee income (including preferential reduction and exemption for members) collected from members. When the risk reserve reaches 10 times of the registered capital of the exchange, it may not be withdrawn.
2. The risk reserve must be accounted for separately and stored in a special account, and shall not be used for other purposes except for making up the risk loss. The use of risk reserve must be approved by the board of directors of the exchange, reported to the China Securities Regulatory Commission for the record, and carried out in accordance with the prescribed purposes and procedures.
Exchanges and futures brokerage companies have to settle accounts every trading day. When the investor's margin is insufficient and below the specified proportion, the futures company will forcibly close the position.