What is a margin call:
Many people don't know what a margin call is? Let's give you an example! For example, if a bitcoin costs 50,000 US dollars, you spend 50,000 US dollars to buy a bitcoin, this is a normal transaction.
But there is another concept, which is leveraged trading. You still buy a bitcoin, this time you only need to pay 10%, 5,000 US dollars, and I will pay the remaining 90% for you, which is the so-called ten-fold leveraged trading.
Of course, the 45,000 I paid for you is not given for free, it is lent to you, and you must pay me back later.
If Bitcoin rises to 55,000, it is a 10% increase. You sell it, pay me 45,000, and you still make a net profit of 10,000. In other words, it is equivalent to doubling your 5,000 principal.
Of course, if Bitcoin falls, falls to 45,000, you will face a problem, the remaining value is only enough to pay back the money I lent you. So although it has only fallen by 10%, under the ten-fold leverage, your own 5,000 is equivalent to losing all your money.
At this time, you say that you are sure that the price will rise back, you don't sell it, and hold on, is it okay? Definitely not. You can hold on to your own money, but the money I borrowed from you is my money. Why should I hold on to you? What will you pay me back if the price doesn't go up? So I have the right to sell the coins for you and take my 45,000 directly. Even if you sell slowly and Bitcoin falls to 44,000, not only will you lose all your money by selling Bitcoin, but you will also owe me 1,000. This 1,000 is a debt that you must pay back, which is the so-called liquidation.
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