What Is the Consequence of Having Insufficient Margin to Cover a Loss?
The primary consequence is the forced liquidation of the position by the exchange's risk engine. If the loss exceeds the maintenance margin, the position is closed to prevent the account balance from becoming negative.
If, in a rare, fast-moving market, the liquidation fails to fully cover the loss, the exchange's insurance fund covers the deficit. The trader's account is zeroed out for that position.
