What Level of Liquidity Is Considered Safe?
The remaining liquidity in your stock account is an important indicator of the safety of your account funds. The higher the remaining liquidity, the more available funds you have to cope with market fluctuations and to safeguard your existing positions. Below are some reference standards regarding stock remaining liquidity:
High Safety: Remaining liquidity greater than 50% means your account has ample funds to handle market volatility. When using leverage or margin trading, this can effectively reduce the risk of forced liquidation.
Moderate Safety: Remaining liquidity between 30% and 50% is still relatively safe, but you should be mindful of market volatility risks and ensure sufficient funds to meet potential margin calls.
Low Safety: Remaining liquidity below 30%, especially approaching 15% to 20%, indicates significant financial pressure on the account. If the market experiences large fluctuations, your positions may face the risk of forced liquidation.
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