Liquidation: definition and meaning
Liquidation is the forced closing of a leveraged position when your margin can no longer cover losses. The liquidation price is the level that triggers it.
Why it matters
You can lose your entire margin, so keep leverage low and monitor positions.
Related terms
- Leverage
Leverage lets you open a position larger than your own capital by borrowing, which multipl… - Margin
Margin is the collateral you put up to open and maintain a leveraged position.…
Guides that explain more
- Spot vs Futures Trading: What's the Difference?
- What Is Leverage in Crypto Trading?
- What Is Liquidation in Futures Trading?
Educational content only, not financial advice.