• Foreign exchange trading control risk measures

    read:2023/2/25 3:04:41

    Foreign forextradingaccountstype as a forextradingaccountsregister exchange exchange front-line management institutions, the market cashback forex has a full understanding of the development of foreign exchange trading in the past hundred years, foreign exchange formed a set of effective risk management forex trading accounts these systems are mainly the margin system; up and down stop system; position limit system; large account reporting system and forced position closing system I. Margin system Margin system Is in the foreign exchange trading, each trader must be bought and sold by a certain percentage of the value of foreign exchange (usually 5%-10%) to pay a small amount of money, as a financial guarantee to perform foreign exchange, and depending on the foreign exchange price changes to determine whether to add funds, in order to keep the margin level above the corresponding level This from the system to ensure the integrity of each trader involved in foreign exchange transactions to fulfill the contract Second, the stop System The stop system refers to the foreign exchange trading price in a trading day shall not be higher or lower than the specified range of up or down more than this range of the offer will be considered invalid, can not be traded This is an important risk management system with the margin system It is at least to ensure that each traders margin can withstand the days trading risk, through the daily non-liability settlement system (that is, in the days trading Traders with losses must make up the margin before the market opens the next day), from the theoretical foreign exchange trading risk is controlled to a minimum C. Position limit system Position limit system refers to the foreign exchange to prevent manipulation of market prices, to prevent excessive concentration of foreign exchange market risk in a small number of investors, the number of positions of members and customers to limit the system exceeds the limit, the exchange can be forced to close positions in accordance with the provisions Or increase the margin ratio This is the exchange to control the degree of market risk, to prevent the expansion of the risk of important measures Fourth, the large account reporting system The large account reporting system refers to when the speculative position of a member or customer position in a variety of contracts reached the exchange of its speculative position position limit of 80% or more, the member or customer should report to the exchange of its capital, position situation, etc. This is closely related to the position limit system This is an important system to prevent large investors from manipulating market prices and controlling market risks. V. Forced position closing system The forced position closing system refers to the system that the exchange or foreign exchange brokerage company implements forced position closing in order to prevent further expansion of risks when the members or customers trading margin is insufficient and is not made up within the specified time, or when the members or customers position exceeds the specified limit. In addition, the system related to the control of risk also has a daily debt-free settlement system and risk reserve system