Liquidation Engine for Crypto Derivatives Trading: Here's What You Need to Know
Too Long; Didn't Read
Traders open a margin account by signing a "margin agreement" under which the crypto in the account is pledged to the derivatives exchange. When the prices move against the trader, the trader is required to deposit additional funds in the margin account to maintain his positions. If the trader's account value falls below the required minimum maintenance level, his position is liquidated in order to cover the margin call.