⏰Liquidations

1. What is a liquidation?

Liquidation is the forced closure of a trader's open position, which occurs when the unrealized losses incurred by a trader exceed the amount of margin in their trading account.

2. Estimated liquidation price

To help users manage their positions, Zona displays an estimated liquidation price for all open positions. Users may reference this estimated price to help avoid liquidations. An example is, when the market price moves close to the liquidation price, the user may choose to deposit an additional margin to their trading account.

It is important to note that this price is only an estimate, and should not be relied upon as the final source of truth when trading.