Does the so-called gold explosion sound scary? It is difficult to understand the general meaning of the explosion. Now we need to remember other related terms. Here's what will happen in the gold explosion brought by Bian Xiao. I hope you like it.
What will happen when gold explodes?
Gold short position refers to that under some special conditions, the loss is greater than the deposit in the investor's account. After the system is leveled, the remaining funds are the total funds MINUS your losses, and generally there will be a part left.
When the market situation changes greatly, if most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, it is easy to explode the position because of the leverage effect of margin trading. Under normal circumstances, under the daily liquidation system and the compulsory liquidation system, there will be no explosion of positions. However, in some special circumstances, such as when there is a gap change in the market, accounts with more reverse positions are likely to explode.
Will speculation in gold be ruined?
Gold futures speculation may lose everything. Short position means that the margin in the investor's account is not enough to maintain the original contract, and he is forced to close his position because of insufficient margin. After the investor is forced to close his position, the remaining funds of the investor are the total funds MINUS the losses, and there may be a surplus.
If most of the funds in the investor's margin account are occupied by trading margin, and the trading direction is opposite to the market trend, the margin loss will fall below the liquidation line, which will easily lead to investors' short positions. When the market changes greatly, if short positions lead to losses, which are caused by investors, investors need to make up the losses, otherwise they will face legal recourse.
To avoid this situation, investors need to control their investment positions, manage their funds properly and never trade in Man Cang. And set the stop loss point according to the investor's trading strategy, try not to go against the trend, and don't blindly follow the trend.
Loss amount of short position
The loss amount of short position depends on many factors, including position, leverage ratio and market fluctuation. Take April 2023 1 1 as an example. On that day, the spot gold price fluctuated greatly, with the highest reaching about 1800 USD/oz and the lowest falling below 1700 USD/oz. If an investor buys 10 lot of spot gold at the price of $0/750 per ounce (each lot 100 ounce) and the leverage ratio is 1: 100, the required margin is175,000. If the price falls below 1700 USD/oz, investors will face the risk of short positions. If the investor's margin account is short of funds, resulting in his position being forced to close, he will lose at least $6,543,800+0.75 million.