What Are the Pros and Cons of an Automatic Liquidation System versus a Manual Margin Call?
Automatic liquidation is fast and minimizes the risk of the account balance going negative, protecting the exchange and insurance fund (pro). However, it removes investor control and can exacerbate market volatility by instantly dumping large orders (con).
Manual margin calls give the investor time to decide (pro) but increase the risk of the account falling into deficit if the market moves quickly (con).
