Is the forced liquidation of cryptocurrency contracts a total loss? Do you still have the security deposit?

When investors play cryptocurrency contracts, once their positions move in the opposite direction at the latest transaction price, when the user's margin rate is less than or equal to 100% and a certain loss occurs, the exchange will force leveling. The purpose of the position is to ensure that the account will not have a negative balance or excessive losses. For investors, they are most worried about losing their assets when they encounter forced liquidation. Is the forced liquidation of the contract a total loss? According to data analysis, the forced liquidation of a contract does not necessarily mean a total loss, depending on the difference between the closing price and the opening price. The editor below will tell you in detail.

Is the forced liquidation of the contract a total loss?

The forced liquidation of a contract does not necessarily mean a total loss, but depends on the difference between the liquidation price and the opening price of the contract party, as well as factors such as market fluctuations and liquidity. Forced liquidation means that the trading platform forcibly liquidates a trader's position in accordance with certain rules and conditions to ensure that the account will not have a negative balance or excessive losses.

Is there still a contract liquidation deposit?

In cryptocurrency contract trading, there is also usually the concept of liquidation margin. The contract trading platform may require traders to provide a certain amount of margin when conducting contract transactions to maintain the stability and security of their positions. This margin is often called initial margin or starting margin. When the contract party's account funds are insufficient to meet the maintenance margin level, the trading platform may perform forced liquidation operations. In this case, a forced liquidation may result in the trader losing part or all of their margin, depending on the circumstances.

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