Margin is the money paid in advance as a credit guarantee during the transaction. The futures trading margin shall be kept by the Exchange as the financial guarantee for its performance of futures contracts.

The exchange charges both buyers and sellers the same fees. When one party's margin is insufficient, it will implement compulsory additional or leveling measures to ensure the ability to pay and the transaction process is fair and just.

The exchange collects deposits from futures companies (i.e. members). The exchange sets the minimum margin standard according to the futures varieties and adjusts the margin level according to the market risk.

The exchange sets the charging standard according to the risk level of futures contracts, and can adjust the standard according to the changes of market conditions, which is generally not higher than 15%.

Investors participate in futures trading through futures companies, so the proportion of margin paid to futures companies is determined by futures companies. Futures companies have the right to adjust the margin ratio by themselves according to the regulations of futures exchanges and clearing institutions, market conditions, or when they think it is necessary, but it will never be lower than the level stipulated by the exchanges.

How does the futures margin mechanism work?

Tip:

Open position: open a futures contract, that is, participate in the transaction, and there will be an occupation deposit in the account.

Close position: Close the futures contract, that is, close the transaction, and the occupation margin will be released.

Available funds: funds in futures accounts that are not occupied by margin.

Second, the price limit system.

The price limit system limits the range of investors' buying price and selling price when trading. This interval is generally obtained by multiplying the settlement price of the previous trading day by the price limit prescribed by the rules, and the specific value can generally be obtained through quotation or trading software.

Because the quotation beyond this range is regarded as a scrap, when the price touches the limit price, it is often difficult to continue to conclude the transaction, which leads to the suspension.

Among the rules of price limit, the most complicated is the adjustment rule of price limit. The exchange implements the price limit system, which limits the liquidity of trading to some extent.

Liquidity is the life of futures, and too many restrictions will bring more adverse effects. Therefore, the exchange has formulated the adjustment rules of the price limit. When the contract is in a price limit state five minutes before closing, the price limit will be adjusted the next day.

Different varieties have different adjustment rules. The core idea of adjustment is not only to make the price fluctuation range not affect the conclusion of the transaction, but also to control the maximum risk of a single day within a certain range. For example, in the three-board system implemented by some varieties of Shanghai Futures Exchange, for varieties that continuously rise and fall, every time they touch+1, the range of rise and fall increases by 3%.

Hope to adopt!