Forced closure of a leveraged position when equity falls below the venue’s maintenance requirements.
By Nadeem Ahmed·Updated 2026-09-18
Exchanges liquidate using mark prices, maintenance margin rates, and sometimes insurance funds. Napkin math is a first pass — always confirm on the venue calculator.
Bankruptcy price is a theoretical zero-equity level; liquidation usually happens earlier. Lower leverage and wider buffers reduce forced-exit risk.
Forced closure of a leveraged position when equity falls below the venue’s maintenance requirements.
Exchanges liquidate using mark prices, maintenance margin rates, and sometimes insurance funds. Napkin math is a first pass — always confirm on the venue calculator.
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Updated 2026-09-18. Educational only — not financial advice. All terms