PLAIN ENGLISH
What does Liquidation mean?
Liquidation happens when a leveraged position loses enough value that the trading venue automatically closes it to protect the borrowed funds. It is one of the main risks of using leverage.
IN THE WILD
How people use it
Perpetual futures, margin markets and leveraged trading.
EXAMPLE“That wick was enough to trigger a wave of liquidations.”
ALSO USED AS
liq · liquidated