First, the liquidation method
Generally, there are two liquidation methods, hedging liquidation and forced liquidation. Hedging liquidation is like "free love", which is a completely independent behavior of investors. When the market trend is in line with expectations, investors can sell the bought bullish contracts in time to make a profit by "buying low and selling high", or they can buy the sold bearish contracts to earn the difference. When the market trend is inconsistent with investors' expectations, closing positions in time can also effectively stop losses. In contrast, compulsory liquidation, like "arranged marriage", is a compulsory act. When investors lose too much, resulting in insufficient trading margin, futures companies and other institutions will force liquidation regardless of whether users like it or not, while futures trading adopts leveraged trading system, and investors can make large transactions with small funds.
Second, the consequences of "strong peace"
Once it encounters a "strong level", investors are likely to suffer heavy losses under the leverage amplification effect. For investors, opening or closing positions is a compulsory course. When opening or closing positions, we should not only seize opportunities, but also know how to control risks, do what we can, and avoid blindly following suit. Especially when there is a loss, investors should always pay attention to the loss situation and avoid being stuck in the "strong level". If it is strong, the user will lose more than the deposit.
To sum up, the forced liquidation of the futures third board is likely to have serious consequences, but opportunities and challenges coexist. Users are advised to keep a cool head after closing their positions and make a full analysis of their own situation. And take corresponding measures in time to reduce their own losses.