The compulsory liquidation right of the exchange means that when the spread loss between the open contract held by the customer and the current transaction settlement price exceeds a certain proportion, and the customer fails to pay the additional margin within the prescribed time limit, the futures brokerage company has the right to compulsory liquidation of the customer's hand contract, so as to reduce the margin level and risk and ensure that the customer is free from greater economic losses, and the consequences of compulsory liquidation shall be borne by the customer.
The forced liquidation of customers by futures companies refers to the forced liquidation of customers due to insufficient funds and backlog.
For example, if you originally bought 100 lots of soybeans, the margin ratio was 10%, and the position occupied 300,000 yuan. Now, due to the drastic changes in the market, the exchange has increased the margin ratio to 15%, and your 300,000 yuan can only maintain 80 positions, so either you add additional funds to continue to maintain your 100 position, or the futures company will close the position of 20 lots of soybeans.