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For information and learning only. Not investment advice. Crypto assets involve risk.

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Glossary

Terms7 shown

Mark PriceThe exchange-calculated fair value reference for the contract, used to measure unrealized profit and loss, check margin, and trigger liquidation.
leverageUsing borrowed funds to increase trading volume amplifies losses and may increase the risk of forced liquidation during periods of severe market volatility.
liquidationThe process by which a leveraged position is forcibly closed due to insufficient margin requirements or other reasons.
Cross margin modeA mode that considers the assets and multiple positions in a derivatives account together when calculating margin and liquidation risk.
Hedge liquidationEstablishing an equal-sized contract in the opposite direction to offset the existing futures position.
Forced LiquidationA risk-management mechanism in which a leveraged position is forcibly closed by the system after moving adversely beyond a specified threshold.
LiquidationThe disposal of a position or collateral that occurs when collateral or margin requirements are not met; the specific conditions are determined by the product.

All terms loaded

Definition

Forced Liquidation

A risk-management mechanism in which a leveraged position is forcibly closed by the system after moving adversely beyond a specified threshold.

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