Classroom
Liquidation
The forced closing of a leveraged position when losses wipe out the margin. Liquidation cascades can sharply accelerate a price move.
Category: DerivativesWhere you see this on charliedesk
Related terms
Leverage
Trading with borrowed funds that multiply both gains and losses. 10x leverage means ten times the exposure of your deposit.
Funding rate
A periodic payment between long and short positions on perpetual futures. It keeps the futures price near spot; positive funding means longs pay shorts.
Open interest (OI)
The total value of open futures positions in the market. Rising OI means leverage and new money are flowing in.