What Is the Difference between Margin Call and Liquidation?
A margin call is a warning or notification that a trader's margin is approaching the maintenance margin level, requiring them to deposit more collateral to avoid liquidation. Liquidation, conversely, is the automatic, forced closure of the position by the exchange's risk engine because the margin has already fallen below the maintenance level.
A margin call offers a chance to save the position, while liquidation is the consequence of failing to meet the call.
