Liquidation
Forced closure of a leveraged position when collateral falls below the required level.
intermediate
trading
Explained Simply
When trading with leverage, you borrow funds to increase your position size. If the market moves against you and your collateral drops below the maintenance margin, the exchange will automatically close your position to prevent further losses. Liquidation usually means losing your entire margin. Higher leverage means a smaller price move can trigger liquidation — 10x leverage means a ~10% move against you results in liquidation.
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