If a user’s Margin Usage (MU) reaches 100%, all of the user’s open orders will be immediately cancelled. Should the user only have open positions (no open orders), any remaining margin and open positions will be taken over by the Exchange.
At the time of liquidation, any remaining balance in the user’s account will be taken over by the Clearing to cover for the cost of liquidation. For instance, if a user has Rp1,000,000 in maintenance margin when liquidation occurs, this amount will be taken by the Clearing, reducing the user’s balance to zero.
Following liquidation, PT KKI’s Clearing will work to strategically close the user’s positions on the order book to minimize market impact. Should these exits yield a surplus (i.e., a profit), the excess will be allocated to the insurance fund at CFX.
The insurance fund serves as a protective reserve for the trading ecosystem. As a central counterparty, PT KKI steps in to cover obligations when one side of the trade defaults — for example, if the losing party becomes insolvent — ensuring the winning side still receives payment.
Without the insurance fund, PT KKI would risk absorbing substantial losses, potentially compromising the stability of the entire futures trading system.
In summary, the insurance fund helps uphold the stability of the trading ecosystem by safeguarding both winning and losing parties, particularly in the event of a default. This system ensures that users receive their payouts even if the counterparty cannot fulfil their obligations.
For more information about PT KKI, please visit https://www.kliringkomoditi.id/id/about-us/.