The liquidation of Eureka Exchange is a situation where the position is forced to be liquidated due to insufficient margin when conducting leverage trading on Eureka Exchange. This situation is relatively common in the trading market and is also one of the risks of leveraged trading.
European Exchange sets a margin ratio in transactions. The margin ratio determines the degree of risk that a trader can bear. The lower the ratio, the greater the risk. When the margin reaches the liquidation ratio, Eureka Exchange will close the position between the market price and the stop loss price. Specifically, if the trader's margin ratio is less than or equal to the liquidation ratio (set at 15%), Eureka Exchange will trigger the liquidation mechanism and forcefully close the position to ensure that the trader's account will not be exhausted by losses. .
The principle of Ouyi liquidation can be explained from two aspects:
1. Risk control principle: The exchange aims to prevent traders from losing account funds due to some accidents or their own mistakes. If there is a loss, set forced liquidation rules to ensure the safety of traders' funds.
2. Principle of market stability: The role of forced liquidation on Eureka Exchange is also to prevent a certain position from having an excessive impact on the market, thereby maintaining market stability.
OYi liquidation is a risk for traders, but it will also have a certain impact on institutions such as exchanges and markets.
1. For traders, if the margin ratio is forcibly adjusted to the liquidation line, even if it returns to the safety line, a certain amount of property will be lost because the position has been closed.
2. For exchanges, with the forced liquidation rules, traders’ risks are lower, so traders’ transactions are more stable, which is more conducive to the development of the exchange and can reduce the impact of bad lending behaviors on the market. Influence.
3. For the market, the forced liquidation mechanism can reduce excessive fluctuations that affect the market, thereby improving market stability.
Ouyi liquidation is one of the inevitable risks in the leveraged trading market. Traders should try their best to comply with the margin ratio requirements and avoid such risks. In addition, for exchanges, formulating reasonable forced liquidation rules can better provide traders with a stable trading environment and promote the healthy operation of the market.
At the same time, Ouyi liquidation also reminds us that we must always be vigilant during the process of leveraged trading, do not invest too much money in participation, choose a suitable trading platform, and at the same time set up a trading platform within the tolerance range. Establish a good stop loss line, manage stop losses well, close positions in a timely manner, and avoid risks.
In general, Ouyi liquidation is a common phenomenon in the leverage trading market. Traders need to avoid risks reasonably, exchanges need to develop reasonable insurance mechanisms, and the market needs to maintain stable operation, and Achieve long-term trading results.
The above is the detailed content of What does it mean to close a position on Eureka Exchange? EUYI Liquidation Rules. For more information, please follow other related articles on the PHP Chinese website!
![[Web front-end] Node.js quick start](https://img.php.cn/upload/course/000/000/067/662b5d34ba7c0227.png)
