Liquidating refers to the act of converting an asset or cryptocurrency for fiat or crypto equivalent such as stablecoins. A liquidation can either be a forced event or a voluntary act. A forced liquidation involves an automatic conversion of assets or crypto’s when certain set conditions are met. In cryptocurrency, forced liquidations usually occur in margin trading when the trader fails to maintain the needed funds for a leveraged position. When somebody gets liquidated, due to a margin call. That person has lost its position, including the initial margin.
Using Liquidation in a sentence
“My long position on BTC is under water, not much longer until I face liquidation.”
“I feel that the entire market is going down soon so I am liquidating a lot of my positions for fiat to protect my portfolio.”
‘’unfortunately I just got liquidated in my short, I expected the market to go lower!’’