Liquidation

Isolated Margin :-

Each trade has a separate liquidation price. When the margin dedicated to a particular trade becomes insufficient, that trade alone is liquidated. Other trades are not affected.

Cross Margin :-

Liquidation in cross margin is determined by a maintenance margin ratio. All of the positions may be liquidated simultaneously when the margin available across all positions falls below the desired threshold.

Equation :-

Cross Margin Ratio = Maintenance Margin / Total Cross Margin

Rule of Thumb:

Smaller cross margin ratio, better and safer the positions are.

100% margin ratio will give liquidation for all open positions.

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