What are the circumstances that trigger a margin call in the cryptocurrency market?

3 answers

• Tom BrovenderSep 22, 2024 · 10 months ago
  When the value of the collateral used for a leveraged trade drops below a certain threshold, a margin call is triggered. This is to protect the lender from potential losses. The specific threshold may vary depending on the exchange or platform you are trading on. It's important to closely monitor your positions and ensure you have enough collateral to cover potential losses to avoid a margin call.
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• MUHAMMAD DANIAL HAIKAL BIN MOHAug 26, 2020 · 5 years ago
  A margin call in the cryptocurrency market can occur when the price of the asset being traded experiences a significant decline. This can lead to a situation where the value of the collateral is insufficient to cover the borrowed funds. It's crucial to set appropriate stop-loss orders and manage risk effectively to minimize the chances of a margin call.
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• Nora AlyMay 21, 2025 · 2 months ago
  In the cryptocurrency market, a margin call can be triggered when the leverage ratio exceeds a certain limit set by the exchange. This is to prevent excessive risk-taking and potential default on the borrowed funds. Different exchanges may have different leverage limits, so it's important to be aware of the specific rules and regulations of the platform you are trading on. Always trade with caution and consider the potential risks involved.
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