where liquidated money go ?🤷
When a position gets liquidated, where the money goes depends on the type of liquidation and the platform involved. Here’s how it typically plays out:
1. Crypto and Stock Trading (Margin & Futures Markets)
If you're trading with leverage and your position gets liquidated, the collateral (the margin you put up) is used to cover the losses. The money doesn’t just vanish—it’s redistributed:
Some of it may go to the exchange’s insurance fund, which helps cover losses if needed.
Some goes to the counterparty or market makers, who step in to fill your liquidation order.
In certain situations, the platform may auto-deleverage other traders’ positions to keep the market stable.
2. Business Liquidation or Bankruptcy
When a company goes under, its assets are sold, and the money is distributed in a set order:
Creditors (like banks and bondholders) are first in line to get paid.
Shareholders (investors) are last in line—and if the company has too much debt, they may not get anything.