Oriental Securities Adds 115% 'Instant Liquidation Line' to Margin Trading

Oriental Securities announced on May 18, 2026, that it is adding an ‘即时平仓线’ (instant liquidation line) monitoring threshold to its margin financing and securities lending business to enhance risk control and protect investor interests, according to the company’s official notice.

What Is the ‘即时平仓线’?

The ‘即时平仓线’ is a specific maintenance guarantee ratio threshold used by Oriental Securities to monitor the risk status of customer credit accounts. The company has set this parameter at 115%, with the right to adjust it dynamically based on market conditions, risk management requirements, and individual customer risk tolerance.

According to Oriental Securities’ announcement: “The company has the right to adjust your instant liquidation line parameters based on market conditions, self-risk management needs, and your risk tolerance.”

Not a New Industry Practice

Contrary to investor speculation, this mechanism is not a new industry regulation. Multiple brokerages have implemented similar thresholds under different names. According to a senior margin trading officer at a leading brokerage quoted by Pauper News (澎湃新闻): “There are several market-wide unified key thresholds in maintenance guarantee ratios—for example, 300% for the extraction line and 130% for the liquidation line. Each brokerage now sets slightly different liquidation lines for different customers, but 130% is mainstream.”

Comparable implementations at other brokerages include:

• Guotai Huatai Securities: “Emergency liquidation line” at 110% maintenance guarantee ratio
• Galaxy Securities: “Minimum line” at 115%
• Guoxin Securities: “Next-day liquidation line” at 115%

The same margin trading professional noted: “Setting a 115% ‘instant liquidation line’ is not an industry innovation—each brokerage simply uses different names. Different brokerages’ instant liquidation line ratios also vary.”

Why Was It Implemented?

The threshold was established in response to the expanded 20% price limit range introduced under the registration system reform. According to the brokerage officer: “Our company’s ‘instant liquidation line’ was set based on the registration system reform when price limits expanded. The reform has been in place for many years. Under 20% price fluctuation limits, large stock price swings easily cause account deficits (穿仓)—where investors owe the brokerage money after liquidation.”

Another margin trading professional confirmed: “The company’s maintenance guarantee ratio line below the liquidation line was set long ago. Overall, the ‘instant liquidation line’ is actually a standard clause in margin trading contracts.”

Liquidation Timeline: Not Truly ‘Instant’

Despite the name containing ‘即时’ (instant), the process includes a grace period for investors to add collateral. According to Oriental Securities’ margin trading contract terms reviewed by Pauper News:

Oriental Securities: If the maintenance guarantee ratio falls below the instant liquidation line after T-day close, the customer must restore the ratio to the liquidation line (130%) or above by T+1 morning market close. If the customer fails to do so, the company has the right to execute forced liquidation after T+1 morning market close.

Guoxin Securities follows a similar structure: Customers with Nasdaq-style board permissions must supplement collateral by T+1 morning 11:30 AM to restore the ratio to at least 130%. If insufficient collateral is added, forced liquidation proceeds as contractually specified.

Without the instant liquidation line, the typical timeline would be: if the ratio falls below the liquidation line on T-day, the brokerage requires collateral addition by T+1, with forced liquidation on T+2 if not met. With the instant liquidation line in place, forced liquidation can occur as early as T+1 afternoon.

Risk Control Purpose, Not Market Timing

Multiple industry professionals emphasized that the mechanism serves risk management, not market-timing objectives. As one margin trading officer stated: “The main starting point for setting the ‘instant liquidation line’ is risk control, not market conditions.”

Another professional elaborated: “Setting an additional maintenance guarantee ratio threshold below the liquidation line serves two purposes: first, it protects creditor rights—the brokerage’s interests—which is a risk control requirement. Second, under expanded price limits, it prevents account deficits that would harm investors.”

Market Context

According to Wind data, as of May 11, A-share margin financing balances reached 28.13 trillion yuan, marking a historical high.

FAQ

Q: Is Oriental Securities’ 115% ‘instant liquidation line’ a new industry requirement?

A: No. Multiple brokerages have implemented similar thresholds under different names for years. Guotai Huatai uses “emergency liquidation line” at 110%, while Galaxy and Guoxin Securities both use 115% thresholds. According to industry professionals, this is a standard clause in margin trading contracts, not a new regulation.

Q: Will my account be liquidated immediately when the ratio drops to 115%?

A: Despite the name, the process is not truly instant. Oriental Securities gives customers until T+1 morning market close to add collateral and restore the ratio to 130%. Forced liquidation only occurs after T+1 morning close if the ratio remains below the threshold—typically in the afternoon.

Q: Why did Oriental Securities implement this mechanism?

A: The threshold was designed to manage risk under the expanded 20% price limit range introduced by the registration system reform. Large stock price swings under this broader range can cause account deficits where investors owe the brokerage money. The extra threshold provides an earlier warning and prevents such scenarios, protecting both brokerages and investors.