Liquidation
In short
Liquidation is the forced closing of a leveraged position when losses threaten to consume the posted collateral. The exchange closes automatically — the stake is gone.
The liquidation price is fixed at entry and moves closer to it with higher leverage. Cascades of liquidations amplify crashes further.
Can I lose more than my stake in a liquidation?
At reputable crypto exchanges normally not — the position is closed beforehand (isolated margin).
Related terms
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