Contract liquidation refers to a series of measures taken to reduce or eliminate losses when investments in contract trading result in losses, restoring the account funds to a relatively safe or profitable state. Here are some common methods for contract liquidation:

Timely stop-loss

• When it is found that the market trend is contrary to expectations and losses reach a certain level, decisively close positions to stop losses and avoid further expansion of losses. This requires investors to have strong execution ability and risk control awareness.

Counter-trend increase in positions

• When signs of a market reversal appear, gradually increase the holdings of counter-trend contracts by a certain proportion to lower the average cost. However, this method carries high risk and requires investors to have accurate market judgment; otherwise, it may increase losses.

Hedging operations

• Use related contracts or other financial instruments for reverse operations to hedge the risks of existing contracts. For example, in the futures market, one can hedge price fluctuation risks by simultaneously holding long and short contracts of different months.

Rolling operations

• When the market is in a range-bound fluctuation, one can gradually lower costs through continuous high selling and low buying, i.e., selling high-priced contracts and buying low-priced contracts, to achieve liquidation.

Waiting for the right opportunity

• If investors believe the market is only undergoing a short-term adjustment and the long-term trend is still favorable for their positions, they can choose to patiently wait for the market to warm up and close positions for profit when prices rise to a certain level.

Contract liquidation requires investors to possess rich market experience, a good mindset, and risk control ability, while choosing suitable liquidation methods based on specific market conditions and their own position status. In contract trading, investors should always keep in mind the importance of risk control and avoid excessive leverage and blind following.

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