What Is the Primary Difference between a Margin Call and a Liquidation Notice?
A margin call is a warning and a demand for action, giving the trader a chance to deposit more funds to save the position. A liquidation notice (or the automated liquidation event itself) signifies that the required threshold has been breached and the position is being closed by the platform to prevent further loss, often with little to no opportunity for the trader to intervene.
Glossar
Liquidation Notice
Notice ⎊ A liquidation notice, within the context of cryptocurrency derivatives, options trading, and broader financial derivatives, represents a formal communication issued by an exchange or clearinghouse indicating that a trader's margin account has fallen below the required maintenance level, triggering an automated process to close out positions and cover potential losses.
Primary Difference
Comparison ⎊ This concept necessitates a rigorous contrast between two related financial instruments or strategies to isolate the most critical differentiating factor.