Liquidity risk is the risk that investors can't buy and sell futures contracts at reasonable prices in time to successfully open positions or close positions. Due to poor market liquidity, it may be difficult for investors to conduct futures trading quickly, timely and conveniently.
For example, investors have expectations for the market and intend to buy for a long time, but the market transactions are not active, so it is difficult for investors to buy the expected number of transactions at the current market price. At this time, if they want to buy it all, they must raise the purchase price, which invisibly increases the investment cost.
Generally speaking, contracts that are far away from the delivery month have many uncertain factors during the period, the price expectation is difficult, the margin requirement is high, and the liquidity is poor. When trading, investors can first judge the activity of futures contracts from their positions and turnover, and the contracts with the largest positions or turnover are often the most liquid.
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Precautions:
There are many kinds of transactions in the futures market itself, so you should choose the appropriate operation. Don't invest in any opportunities, it will cause great losses. Try to keep an eye on a variety for analysis and understanding, so as to be familiar with the market and know fairly well.
Pay attention to the investment of funds at all times. Generally speaking, the investment in the futures market should not exceed 15% of your overall funds. This is because the risk of the futures market is greater than any other wealth management products, so the investment quota should be limited.
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