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Ep. 327 - What are "derivatives" (options & futures) & Why They Matter, w/ Phemex CEO Jack Tao

CRYPTO 101

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Futures and Liquidation - What Is the Difference?

Liquidation is because you use the leverage. At some point that your initial margin, you will take a loss and you cannot keep up your maintenance margin. Liquidation basically takes all your initial margin out of your balance. And there's a liquidity in the engine, we'll try to sell all your positions on the market. So very, very important to realize that when you're trading futures and using leverage. But no guts, no glory.

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