What situation of stock index futures may lead to forced closing positions
What situations may lead to forced closing positions of stock index futures?
Compulsory closing position refers to a compulsory measure taken by the exchange to close the positions of members and clients according to relevant regulations. The implementation of compulsory position closing system can stop the expansion and spread of risks in time.
The measures for risk control and management of China Financial Futures Exchange stipulates that compulsory closing positions will occur under the following five circumstances:
(1) The balance of clearing member's settlement reserve is less than zero and fails to make up within the prescribed time limit;
(2) The positions of clients and trading members engaged in self-supporting business exceed the position limit standard and fail to close their positions within the prescribed time limit;
(3) Being punished by the exchange for compulsory position closing due to violation of rules and breach of contract;
(4) According to the emergency measures of the exchange, the positions should be closed by force;
(5) Other positions should be closed by force.
The forced closing position shall be executed by members themselves, and the time limit shall be the first trading time after the opening of the market. The price of compulsory closing position is formed through market transaction. If the member fails to complete the execution within the specified time limit, it shall be enforced by CICC.
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