How is futures trading settled

Settlement refers to the calculation and transfer of margin, profit and loss, service fee, delivery loan and other funds for members’ transactions according to the trading results and relevant regulations of the exchange. This is an important part for investors to master when they learn the basic knowledge of futures. Settlement includes the exchange’s settlement to its members and the futures brokerage firm’s settlement to its customers, the results of which will be credited to the customer’s margin account.

The settlement of futures exchange adopts margin system, daily no liability system and risk reserve system. This is the basic futures knowledge that investors need to master. It is consistent with the hierarchical structure of the futures market, and the settlement of futures investment is also classified and layered. The exchange only settles accounts for members, while non-members and individuals settle accounts through members of futures brokerage firms.

Futures brokerage company’s settlement to customers:

The specific method of the futures brokerage company to settle accounts with customers is the same as that of the exchange, which is also to settle the profit and loss, transaction fee and trading margin of each customer after the end of each trading day. Trading fees are generally no less than three times the standard set by futures contracts, and trading margin is generally at least three percentage points higher than the margin charged by exchanges.

Futures brokers issue trading statements to clients after the market closes.

After the daily settlement customer margin below as prescribed by the futures exchange trading on margin, the futures brokerage company shall, according to the regulations of the futures brokerage contract way to inform the customer margin, when the customer can’t on time margin, futures brokerage companies to some or all of their forced to unwind positions, until the deposit balance can maintain its remaining positions.

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