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Q » What is liquidation threshold in margin trading?

Steven

02 Nov, 2025

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A » The liquidation threshold in margin trading is the specific point at which a trader's margin account must be liquidated to cover potential losses. This threshold is determined by the collateral's value and the required maintenance margin, ensuring that the trader's account remains solvent. If the account value falls below this threshold, assets may be sold automatically to prevent further losses and fulfill obligations.

Michael

03 Nov, 2025

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All Other Answer

A »In margin trading, the liquidation threshold is the minimum equity required to maintain a leveraged position. If the account equity falls below this threshold, the position is automatically liquidated to prevent further losses. It's a risk management mechanism to protect both traders and lenders from significant losses.

David

03 Nov, 2025

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