๐ธ Where Does Your Money Go When You're Liquidated? ๐ตโ๐ซ ๐ญ
Letโs break it down! ๐
1๏ธโฃ The Exchange (e.g., Binance) collects the liquidation fee, which is taken from your collateral. ๐ฐ
2๏ธโฃ Other Traders (on the opposite side of your trade) may profit because your position is sold to cover their gains. ๐
3๏ธโฃ Insurance Fund: If thereโs extra collateral after covering losses and fees, it goes to the exchangeโs insurance fund to protect against extreme market events. ๐ก๏ธ
๐ก In short, the exchange and the counterparties are the winners: Binance takes the fee, and opposing traders secure their profits! ๐