Liquidation dictionary

What liquidation means in crypto trading, when an exchange closes your position, and what you lose when it happens.

How the exchange risk engine force-closes leveraged positions, the sequence from margin check to market order, and the fees involved.

The price at which your leveraged position gets liquidated, how to estimate it, and why leverage shrinks the distance to it.

The minimum margin fraction that keeps a leveraged position open, how tiers scale with size, and what happens when you fall below it.

What a margin call means, why crypto exchanges mostly skip the warning stage, and how to read your margin ratio before the engine does.

The collateral required to open a leveraged position, its link to leverage, and how it differs from maintenance margin.

How leverage multiplies exposure and risk in crypto futures, what 10x to 125x does to liquidation distance, and the math of survival.

The price at which a position's margin hits exactly zero, why liquidation triggers before it, and who covers the gap when price blows through.

The index-based price exchanges use for margin math and liquidation triggers, and why it is harder to manipulate than last trade.

The exchange war chest that absorbs losses when liquidations close worse than bankruptcy price, where its money comes from, and when it runs out.

What happens when an exchange force-closes profitable positions to cover losses the insurance fund cannot absorb, and how the ranking works.

The exchange service that watches every position, computes margin against mark price, and executes liquidations without human input.

The payment that keeps perpetual futures tethered to spot price, why longs pay shorts in bull markets, and how extremes foreshadow squeezes.

The cash-settled contract with no expiry that dominates crypto derivatives volume, how funding keeps it near spot, and where liquidations live.

The total value of open derivative contracts, why rising OI means new positions and falling OI after a crash means forced deleveraging.

What a liquidation cascade is, why forced selling begets more forced selling, and how to read cascades in live liquidation data with real examples.

How rising prices force shorts to buy back, why liquidations accelerate squeezes, and what the data signature of a squeeze looks like.

The downside cascade where long liquidations feed forced selling, how capitulation days look in recorded data, and how they end.

How markets shed leverage after volatility spikes, the difference between voluntary and forced deleveraging, and how to see it in the data.

Charts that estimate where liquidation prices cluster by leverage level, how they are built, and why recorded data beats predictions.

The dollar notional of positions force-closed in a window, how it is measured, and why honest trackers state their coverage.

The share of liquidation volume coming from longs versus shorts, how to read one-sided flushes, and what a balanced split means.

Why realized P&L of closed positions and liquidation volume are different measures of the same market pain, and what each is good for.

Inverse contracts collateralized in the base coin versus linear USDT contracts, and how each behaves when liquidation approaches.

Sharing margin across all positions versus locking it per position, how each mode changes the blast radius of a single liquidation.