Risk control is a big deal! Investors are the direct bearers of the returns and risks of futures trading. Due to the high-risk nature of futures trading, risk control has become one of the key components for investors to engage in trading. Investors should always pay attention to their positions, margin, and equity changes during the holding process, and handle their trading positions properly. If they participate in continuous trading, they should also pay attention to and reasonably control the trading risks during the continuous trading period.
During the trading process, futures companies calculate the risk of investors' futures trading based on risk rates or other risk control methods, which are generally clearly stipulated in the Futures Brokerage Contract. Futures companies calculate the risk of open contracts for investors on different futures exchanges uniformly. When the investor's risk rate reaches the agreed value, the futures company will issue a margin call notice to the investor in the daily trading settlement report. The investor should promptly add margin before the opening of the next trading day or close the position immediately after the opening. Otherwise, futures companies have the right to forcibly close some or all of the open contracts of investors until the available funds of investors are greater than zero. During the trading process, if the investor's margin is insufficient, the futures company may require the investor to add margin or close the position on their own within the agreed time. Otherwise, they have the right to forcibly close the position.
In the case of limit positions on futures exchanges, when the number of open contracts held by investors exceeds the limit position regulations, futures companies have the right to forcibly close the excess portion in accordance with the limit position regulations of futures exchanges without the consent of investors. Investors should bear the consequences arising from this. In the event that futures exchanges or settlement institutions require futures companies to forcibly close open contracts held by investors in accordance with relevant regulations, futures companies have the right to forcibly close open contracts held by investors in accordance with the requirements of futures exchanges or settlement institutions and relevant rules of futures companies without the consent of investors. Investors should bear the consequences arising from this.
When a futures company forcibly closes its position in accordance with the law or agreement, investors shall bear the handling fees for the forced liquidation and the resulting consequences. After taking forced liquidation measures, futures companies should promptly inform investors of the relevant situation afterwards.
As long as the closing price and quantity selected by the futures company are within a reasonable range under the market conditions at that time, investors cannot claim equity from the futures company on the grounds that they failed to choose the best price and quantity for forced closing. The losses incurred due to the inability of futures companies to take forced liquidation measures due to market reasons are also borne by investors.
In the risk control process, in order to protect their own rights and avoid forced liquidation due to their own reasons, investors should pay attention to the following issues.
Firstly, it is necessary to promptly add margin in accordance with the notification requirements of the futures company. When the investor's margin is insufficient, the futures company will issue a notice of additional margin to the investor in accordance with the provisions of the Futures Brokerage Contract. After receiving the notice, investors should promptly add margin and not delay waiting, otherwise they may be forcibly liquidated.
Secondly, funds in transit are not considered valid deposits. When investors add margin as required by the futures company's notification, it is best to promptly ask the futures company to confirm whether they have received it. When investors have added margin but the futures company has not received it yet, it is considered that the funds are in transit. This situation is not considered a valid deposit, and investors will still be forcibly liquidated for not adding margin in a timely manner.
Thirdly, futures companies determine whether investors' margin is sufficient based on their own margin collection standards. When the margin of investors is lower than the standard of the futures company, the futures company will notify investors to increase the margin according to the agreement. In practice, some investors mistakenly judge whether their margin is sufficient based on the margin standards of futures exchanges, leading to disagreements with futures companies. Investors should avoid this.
Fourthly, during the trading process, avoid full position operations, keep a certain amount of flexible funds in the account, and constantly monitor changes in one's own positions, margin, and equity. Handle one's own positions in a timely and appropriate manner to cope with the situation of insufficient margin caused by severe market fluctuations, and avoid being forced to close positions due to untimely additional margin.
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