What is futures lock up?

Nowadays, more and more attention has been paid to futures. When many people invest in futures, they need to master some relevant knowledge. So, what is futures lock up?

The lock position of futures refers to such an operation method: open a new position in the opposite direction of the original position under the condition of Uneven Elimination of the original position, and the contract month and position size (single volume) are the same. As for the so-called "cross market lock", "cross variety lock" and "cross month lock up", they are essentially arbitrage transactions and are not included in this discussion. Lock position is generally when the position of floating loss, because the trader is not willing to close the position, and have to lock the original position, open a new position on the contrary. In fact, from the perspective of profit and loss, lock position is the same as closing position, because no matter whether the price rises or falls in the future, it will not affect the profit and loss. This is also the reason why some foreign exchanges regard lock position as closing position. Only one is the actual profit and loss, the other is floating profit and loss (but it does not fluctuate with the price at this time, it has actually become a fixed profit and loss), and it is just trading People's psychological feelings are just different. Therefore, I think that the operation mode of lock position is actually a kind of "stealing one's ears and stealing the bell". However, in China's futures market, there are a large number of traders using it, and some even call them "lock up fans". I think it is a kind of practice that gains more than losses, because lock positions have the following disadvantages.
(1) Affect the efficiency of the use of funds. In terms of trading results, lock positions and close positions are essentially the same. After closing positions, they do not occupy any margin, while locking positions need to occupy double the margin of one-way positions. After the lock up, a large amount of margin was occupied unnecessarily, and other varieties could not do it when there was a market, which seriously affected the full and reasonable use of funds.
(2) Affect the order speed. When there is an obvious trend in the variety, the position in the opposite direction must be leveled off first (at this time it is called unlocking), then the guarantee money can be released to open a new position. If it is not a lock position, there is no need to open a new position after closing the position.
(3) Affect the operation mentality. Originally, after closing the position, the trader became an outsider temporarily, and he could treat the price trend of futures with the attitude of bystander, which would be relatively objective and fair. Since there are two-way positions after locking positions, there are gains and losses respectively. Traders are often disturbed by profits and losses and can not focus on the price trend of the market. They often operate because of profit and loss rather than because of the trend. It is just like the previous saying that the narrow wooden strip which was originally put in the low position was artificially put in the high air, which is the same as the reason why opening position is easy to close and difficult to close.
Some people say that you can make money on both sides after you have solved the lock up. It sounds reasonable, but it is not. Because a person who can unlock a lock can open a new position. If he knows which direction to level first, he will know which direction to establish a new position. What's more, due to the influence of profits and losses, the attitude (mentality) of lock holders to the market is often not as rational and objective as the new ones. Therefore, it is not surprising that the lock holders often lose money at both ends if they can not solve the lock well. Some lock up fans think that they often make money from both sides. In fact, it is often not the profit generated by unlocking a good solution. In fact, it is not only the profit that is carried by the dead, because if you first unlock the profit position and close the position, most of the time it will not be solved at the highest point or the lowest point. In this way, the loss of the loss position in the other direction will expand, and the risk will be out of control The only way to turn it into a profit is to carry it without stop loss. Even if there is no analysis on the price trend and complete random trading, the profit will be closed and the loss will be dead carried. The probability of profit will be as high as 80%. However, the loss caused by the other 20% of the position that will not come will be far greater than that of the 80% profit position. Of course, the dead load in lock position is no different.
Lock up is not entirely without merit. Those who are not in a good mood and are not willing to admit losses and stop losses to close positions can achieve the purpose of stopping losses in time by locking positions, which is just like blocking their ears before they dare to steal the bell, which is also a kind of method that has to be done. For those who don't want to pay attention to the variety after closing their positions and losing money, it costs a lot to lock positions to keep an eye on the trend of the variety. For traders with good mentality, there is no need at all. In this sense, "mentality" is money. In addition, for large institutions or market price manipulators, it can also achieve the purpose of influencing the price by locking positions and buying and selling by oneself. However, for the more standardized and mature futures market, this point is not of much significance.

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