b9_1155what is liquidation?
the exchange force-closing a leveraged position when its margin falls below the required minimum.
with high leverage it can happen before the stop is reached. with some products and in fast markets, losses can even exceed the money put in.
related words
- margin the money posted to open and hold a leveraged position.
- isolated vs cross margin two ways an exchange decides how much of your money backs a leveraged position.
- leverage controlling a position larger than the money you put up (the margin).
part of the topic risk: free articles, more words and the guide.
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