How does a margin call work when trading cryptocurrencies?

3 answers

• Dec 26, 2021 · 3 years ago
  A margin call is a risk management mechanism used in trading cryptocurrencies. It occurs when the value of an investor's margin account falls below the required maintenance margin. This can happen due to a decline in the value of the assets held in the margin account or an increase in the amount of borrowed funds. When a margin call is triggered, the investor is required to deposit additional funds or liquidate some of their assets to bring the margin account back to the required level. Failure to meet a margin call can result in the forced liquidation of the investor's positions by the exchange.
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• Dec 26, 2021 · 3 years ago
  In simpler terms, a margin call is like a warning from the exchange that your account balance is getting too low to cover your losses. It's a way for the exchange to protect itself and ensure that you have enough funds to cover your positions. When a margin call is triggered, you have two options: either deposit more funds into your account to meet the margin requirements or close some of your positions to reduce your exposure. It's important to monitor your margin account closely to avoid margin calls and manage your risk effectively.
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• Dec 26, 2021 · 3 years ago
  At BYDFi, we have implemented a robust margin call system to protect our users and maintain the stability of our platform. When a margin call is triggered, our system automatically sends a notification to the user, informing them about the required actions. We provide clear instructions on how to deposit additional funds or close positions to meet the margin requirements. Our support team is also available 24/7 to assist users in managing margin calls and answering any questions they may have.
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