Hedging and liquidation means that futures companies buy futures contracts in the same futures exchange and sell futures contracts in the same delivery month, thus liquidating the futures contracts sold or bought before. Forced liquidation refers to forced liquidation, also known as being cut or cut.
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Closing position refers to the behavior of futures traders to buy or sell futures contracts with the same variety code, quantity and delivery month but opposite trading direction, and close positions.
Hedging liquidation refers to the liquidation of futures contracts previously sold or bought by futures investment enterprises by buying futures contracts on the same futures exchange and selling futures contracts in the same delivery month. Forced liquidation refers to the forced liquidation of the position of the holder by a third party other than the holder (futures exchange or futures brokerage company), also known as liquidation or liquidation.
There are many reasons for compulsory liquidation in futures trading, such as customers' failure to add trading margin in time, violation of trading position restrictions and other irregularities, temporary changes in policies or trading rules, etc. In the standardized futures market, it is most common that customers are forced to close their positions because of insufficient trading margin. Specifically, it refers to the behavior that a futures company forcibly closes some or all of its customers' positions in order to avoid losses. When the trading margin required by the customer's position contract is insufficient, the futures company fails to add the corresponding margin in time according to the futures company's notice or actively reduce the position, and the market situation is still developing in an unfavorable direction, the obtained funds are used to fill the margin gap.
In the course of trading, the futures exchange takes compulsory liquidation measures in accordance with the regulations, and the losses arising from liquidation are borne by members or customers. The realized liquidation profit belongs to the futures exchange's forced liquidation due to the violation of members or customers, which is included in the non-operating income of the futures exchange and is not distributed to the violating members or customers; If the position is forced to be closed due to changes in national policies, continuous daily limit, daily limit and other reasons, it will be distributed to members or customers.
There are many reasons for compulsory liquidation in futures trading, such as failure to add trading margin in time, violation of trading position restrictions and other illegal acts, temporary changes in policies or trading rules. In the standardized futures market, it is most common to be forced to close positions because of insufficient trading margin. In the course of trading, the futures exchange takes compulsory liquidation measures in accordance with the regulations, and the losses caused by liquidation shall be borne by the members or. The realized liquidation profit, which belongs to the futures exchange's forced liquidation due to members or illegal behaviors, is included in the non-operating income of the futures exchange and is not distributed to the illegal members or; Due to changes in national policies, continuous daily limit, daily limit and other reasons, compulsory liquidation is distributed to members.