What Are the Rules for Forced Liquidation of Stocks?

The condition that triggers forced liquidation is when the account's net asset value falls below the maintenance margin requirement for the positions held. The rules for forced liquidation are as follows:

Priority Order for Liquidation:

Positions with a lower maintenance margin ratio (i.e., higher leverage) are liquidated first.

If the leverage is the same, stocks with lower returns are liquidated first.

Proportion of Position to Liquidate:

If the margin of the position to be liquidated / total assets ≤ 25%, the entire position will be liquidated.

If 25% < margin of the position / total assets ≤ 50%, half of the position will be liquidated.

If 50% < margin of the position / total assets ≤ 75%, one-third of the position will be liquidated.

If 75% < margin of the position / total assets ≤ 100%, one-quarter of the position will be liquidated.

Post-Liquidation Check:

After each liquidation, the system checks the remaining liquidity of the account. If liquidity is greater than 0, forced liquidation stops; if not, forced liquidation continues.

Special Situations:

If there are hedge orders during forced liquidation, those hedge orders will be canceled first before proceeding with liquidation.

If forced liquidation occurs before or after market hours and market orders cannot be placed, the system will adjust the latest price by ±1% to execute the liquidation. After the trade, any unfilled orders will be canceled, and the account liquidity will be checked again.

By following these rules, the system ensures that forced liquidation minimizes the impact on the account while meeting the maintenance margin requirements.