What Is a Margin Call and How Is It Automated by a Smart Contract?
A margin call is a demand for a trader to deposit additional collateral to bring their margin account back up to the minimum maintenance level. A smart contract automates this by continuously monitoring the collateral ratio.
Instead of a manual demand, the contract's code will automatically trigger a liquidation of the position when the ratio falls below the maintenance threshold. The contract effectively executes the margin call by taking the necessary action to close the under-secured position.
