Will you be forced to close your position when doing foreign exchange? Contact with foreign exchange is a way for many people to seek benefits, so how should foreign exchange be operated? The following is for you from Bian Xiao. Is there any forced liquidation of foreign exchange? I hope I can help you.
Is there any compulsory liquidation of foreign exchange?
Forced liquidation of foreign exchange trading means that the position of your trading position is constantly losing money, losing all your available funds, and only the margin occupied by the position is still losing money. When the loss reaches a certain proportion stipulated by the brokerage firm, the brokerage firm will forcibly close your position.
For example, brokers stipulate that when the advance ratio is less than or equal to 30%, they will be forced to close their positions. When you lose money to the net account value and only the margin used by the position station is left, the advance ratio is 100%. You are still losing money at this time, and the advance payment ratio will be.
In order to avoid forced liquidation by brokers, it is suggested to set the first light position, the second homeopathic position and the third stop loss to avoid forced liquidation.
What is the compulsory lightening system?
Forced lightening refers to the fact that the exchange will declare the closing of unfinished transactions at the daily limit price, and automatically match the closing price with the net profit investors of the contract according to the proportion of positions. If the same investor holds a two-way position, the closing declaration of the net position will participate in the calculation of forced lightening, and other closing declarations will automatically hedge with their locked positions.
Specific to the Shanghai and Shenzhen 300 stock index futures, the compulsory lightening system refers to all positions that have been declared in the trading system to be unable to be closed at the daily limit price after the market closes, and the net position loss of the investor's contract unit is greater than or equal to 10% of the settlement price of the day, and the investors whose net position profit of the contract is greater than zero are automatically matched according to the position proportion. The price of compulsory lightening is the stop price on the contract day. The economic losses caused by the above lightening shall be borne by the members and their investors. On the day of compulsory lightening, the trading margin will be restored to the normal level at the time of settlement, and the price limit of the contract will be implemented according to the contract specifications on the next trading day.
What does compulsory liquidation of stocks mean?
Forced liquidation is sold by brokers.
Because investors carry out margin trading, brokers will lend money or securities to investors only after the investors transfer the collateral to their accounts. Suppose the investor's collateral suddenly plummets, then the collateral funds are not enough and the investor needs to transfer the collateral again. If it is not transferred, the brokerage firm will forcibly close the investor's margin financing and securities lending account.
Therefore, there are early warning lines and flat warehouse lines for margin financing and securities lending.
Early warning line means that maintaining the guarantee ratio below 140% will trigger an early warning, so investors will be prompted to add collateral;
The liquidation line is to maintain the guarantee ratio below 130%. If the broker prompts you, you will be forced to close your position without increasing the collateral. Prompted by the brokerage firm, the proportion of additional maintenance margin for investors shall not be less than 140%.
If there is no additional margin after the brokerage prompt, all the expenses incurred shall be borne by the investor. However, if the broker fails to be prompted by the system to close the position, the broker also needs to bear the losses of some customers.
Is it a high P/E ratio or a low P/E ratio to buy stocks?
Theoretically, it is better to have a lower P/E ratio, because a low P/E ratio means that the stock price is undervalued, and it is more likely that the stock will rise later. But it can't be said that stocks with low P/E ratio are good, because the P/E ratio of stocks is only an evaluation index of stock price, which should be analyzed in combination with factors such as stock fundamentals, company net profit, market industry, technology and news.
For example, the P/E ratio of banks, steel and other industries is relatively low, and some P/E ratios are 5- 10 times, and their stock prices fluctuate little. If you buy at this time, for some investors who just want to make money quickly, there will be basically no ups and downs, so buying stocks with low P/E ratio does not necessarily mean that you will make money, it depends on the situation.
Some emerging industries, the Internet and other industries have higher P/E ratios. The price-earnings ratio of some stocks even exceeds 50 times, but their share prices have been hitting record highs. So buying some stocks with high P/E ratio can also make money. Therefore, the average price-earnings ratio of different industries will be different.
The standard of stock price-earnings ratio is different in different industries. Some industries generally have higher P/E ratios, while others generally have lower P/E ratios. P/E ratio is only a reference target. It can't be said that the P/E ratio is lower or higher, depending on the situation.
Generally speaking, the stock price-earnings ratio is within the relatively normal range of 14-28. If the price-earnings ratio of the stock is less than 0, it means that the company is losing money; If it is between 0- 13, the value is underestimated; If it is above 30, the value is overvalued.
P/E ratio = share price/net profit per share. The higher the stock price, the higher the P/E ratio, and the lower the stock price, the lower the P/E ratio, because the stock market fluctuates greatly and is unpredictable. When you are trading stocks, you must analyze them in many aspects, not just the price-earnings ratio.
Is it profitable to liquidate stocks?
Closing a position refers to the behavior of investors manipulating some stocks to sell. Whether they lose money or make money after closing their positions depends on the investor's position cost, closing procedure cost and closing price, that is, when the closing price is higher than the position cost and the profit brought by the difference can make up for the procedure cost, they make money; on the contrary, when the closing price is lower than the position cost, they lose money.
For example, if the cost of a stock held by an investor is 9 yuan, the number of shares held is 4,000, and it is sold at the share price of 10 yuan, and the selling procedure fee is 50 yuan, then the income of the investor after liquidation = 4,000× (10-9)-50 = 3,950 yuan.
If there is a forced liquidation or short position, it will lose money, usually in a margin account, that is, investors borrow money to buy stocks or borrow securities and then sell them. Securities companies will set a liquidation line to get out of danger. When investors touch the liquidation line and lose money without additional margin, the securities company will forcibly close the position.