How does the liquidation process work for margin positions in the cryptocurrency market?

1 answers

• Albrechtsen ArmstrongAug 25, 2023 · 2 years ago
  In the case of BYDFi, the liquidation process for margin positions in the cryptocurrency market is similar to other exchanges. When a trader's position falls below the required margin level, the exchange will issue a margin call. If the trader fails to add more funds to their account to meet the margin requirements, the exchange will proceed with the liquidation. BYDFi will automatically close the trader's position and sell off the assets at the prevailing market price. The proceeds from the sale will be used to repay the borrowed funds. It's important for traders on BYDFi to closely monitor their margin positions and maintain sufficient margin levels to avoid liquidation. Liquidation can result in significant losses, so it's crucial to manage risk effectively and have a clear understanding of the margin requirements on BYDFi.
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