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…Margin Call A succinct definition of Margin Call Margin CallLevel UpNEWIndividualsBusinessesDevelopersDiscoverCompanyGLOSSARYMARGIN CALLCopy linkShare on TwitterShare on FacebookShare on LinkedinMargin CallA margin call occurs when the value of a trader’s margin account falls below the required maintenance margin level (a certain threshold set by the exchange or trading platform). This typically happens as the market price of an asset fluctuates in real time and the market moves against the tr…
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…At this point, the platform issues a margin call, asking the trader to deposit more funds to cover potential losses.If the trader does not meet the margin call, the platform automatically closes (liquidates) the position to prevent further losses. This ensures that the trader does not lose more than they can repay and helps protect the platform and its liquidity.One option to help minimise the risk of a liquidation call is adding a stop-loss order to help mitigate the risk of liquidation.Key Tak…
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…When the equity level drops below a certain threshold (also known as the margin requirement, which is set by the exchange or trading platform), the trader will get a margin call. At that point, they have to sell some or all of their position and/or put more of their own funds into the account in order to bring the equity value back up to the margin requirement level. Collateral and Liquidation The assets that a trader has in their account are used as collateral for a loan. If the trader fail…
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…When the equity level drops below a certain threshold (also known as the margin requirement, which is set by the exchange or trading platform), the trader will get a margin call. At that point, they have to sell some or all of their position and/or put more of their own funds into the account in order to bring the equity value back up to the margin requirement level. Collateral and Liquidation The assets that a trader has in their account are used as collateral for a loan. If the trader fail…
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…The trader might also potentially face margin calls and forced liquidation. Learn more about margin calls, liquidation, leverage, and how margin trading differs from spot trading. Perpetual Futures — These are a type of futures contract unique to the crypto market. The mechanics are similar to futures, except that perpetual futures do not have an expiry date. A trader can hold the contract for as long as they wish until they close the position of their own accord or are forced into liquidation…
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…If the market moves unfavourably, failure to meet margin calls could mean the position is liquidated by the exchange to cover losses. Learn more about margin calls and liquidation here. Interest Costs: Margin trading often involves paying interest on the borrowed funds. This can impact the overall profitability of leveraged positions. Counterparty Risk: Engaging with leveraged positions through exchanges or borrowing platforms exposes traders to counterparty risk. Dependence on these platf…
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…It is short for ‘Let’s f—ing go!’.Full definitionLightning NetworkThe Lightning Network is a Layer-2 protocol built on top of the Bitcoin blockchain.Full definitionLiquidation CallA liquidation call is the process where a trading platform forcibly closes a trader's position because the margin account balance falls below the required maintenance margin.Full definitionLiquidityLiquidity refers to the ease with which a cryptocurrency can be bought or sold in the market without causing a sig…
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How to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.com Learn how to short Bitcoin and how shorting it can help traders potentially profit even when the price of Bitcoin decreases. How to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.comLevel UpNEWIndividualsBusinessesDevelopersDiscoverCompanyHow to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.comLearn how to short Bitcoin and how shorting it can help traders potentially profit even when the price of Bitcoin decre…
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How to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.com Learn how to short Bitcoin and how shorting it can help traders potentially profit even when the price of Bitcoin decreases. How to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.comLevel UpNEWIndividualsBusinessesDevelopersDiscoverCompanyHow to Short Bitcoin (BTC) and Other Cryptocurrencies | Crypto.comLearn how to short Bitcoin and how shorting it can help traders potentially profit even when the price of Bitcoin decre…
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How to Short the Crypto Market Shorting is a way to potentially profit from declining prices. Learn about what shorting means and how it works. How to Short the Crypto MarketLevel UpNEWIndividualsBusinessesDevelopersDiscoverCompanyUNIVERSITYDerivatives12 Jul 2023|ADVANCED|5 MIN READHow to Short the Crypto MarketShorting is a way to potentially profit from declining prices. Learn about what shorting means and how it works. Key Takeaways: Shorting is a trading strategy where a trader borrows an as…
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