How leveraged-position liquidation works
Liquidation is the forced closing of a futures position when available margin is no longer sufficient to support it.
Why leverage brings liquidation closer
Leverage increases a position’s notional value relative to margin. The higher it is, the smaller the adverse price move needed to consume the available collateral.
Margin mode matters
With isolated margin, risk is limited to the margin assigned to the position. Cross margin can use account balance to support it, but puts more funds at risk.
Do not rely on liquidation
A liquidation price is not a risk-management level. Use a stop-loss, modest leverage and a sufficient distance from liquidation. Exchange rules, MMR, fees and funding affect the exact level.